UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-09997
Baird Funds, Inc.
(Exact name of registrant as specified in charter)
777 East Wisconsin Avenue
Milwaukee, WI 53202
(Address of principal executive offices) (Zip code)
Charles M. Weber
Robert W. Baird & Co. Incorporated
777 East Wisconsin Avenue
Milwaukee, WI 53202
(Name and address of agent for service)
1-866-442-2473
Registrant's telephone number, including area code
Date of fiscal year end: December 31, 2009
Date of reporting period: June 30, 2009
Item 1. Report to Stockholders.
Semi-Annual Report - Baird Funds
Baird Short-Term Bond Fund
Baird Intermediate Bond Fund
Baird Intermediate Municipal Bond Fund
Baird Aggregate Bond Fund
Baird Core Plus Bond Fund
TABLE OF CONTENTS
Page | |
Baird Short-Term Bond Fund | 1 |
Baird Intermediate Bond Fund | 16 |
Baird Intermediate Municipal Bond Fund | 33 |
Baird Aggregate Bond Fund | 48 |
Baird Core Plus Bond Fund | 70 |
Additional Information on Fund Expenses | 88 |
Statements of Assets and Liabilities | 90 |
Statements of Operations | 91 |
Statements of Changes in Net Assets | 92 |
Financial Highlights | 97 |
Notes to the Financial Statements | 106 |
Additional Information | 120 |
This report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.
Cautionary Note on Analyses, Opinions and Outlooks: In this report we offer analyses and opinions on the performance of individual securities, companies, industries, sectors, markets, interest rates and governmental policies, including predictions, forecasts and outlooks regarding possible future events. These can generally be identified as such because the context of the statements may include such words as “believe,” “should,” “will,” “expects,” “anticipates,” “hopes” and words of similar effect. These statements reflect the portfolio managers’ good faith beliefs and judgments and involve risks and uncertainties, including the risk that the portfolio managers’ analyses, opinions and outlooks are or will prove to be inaccurate. It is inherently difficult to correctly assess and explain the performance of particular securities, sectors, markets, interest rate movements, governmental actions or general economic trends and conditions, and many unforeseen factors contribute to the performance of Baird Funds. Investors are, therefore, cautioned not to place undue reliance on subjective judgments contained in this report.
Baird Short-Term Bond Fund
The Baird Short-Term Bond Fund seeks an annual rate of total return, before Fund expenses, greater than the annual rate of total return of the Barclays Capital 1-3 Year U.S. Government/Credit Bond Index. The Barclays Capital 1-3 Year U.S. Government/Credit Bond Index is an unmanaged, market value weighted index of investment grade, fixed-rate debt issues, including government and corporate securities, with maturities between one and three years.
Portfolio Characteristics
Quality Distribution* | Sector Weightings* |
Net Assets: | $375,588,385 | Annualized Expense Ratio: | ||||
SEC 30-Day Yield:** | Institutional Class: | 0.30 | % | |||
Institutional Class: | 4.53% | Portfolio Turnover Rate: | 32.3 | %# | ||
Average Effective Duration: | 1.89 years | Total Number of Holdings: | 237 | |||
Average Effective Maturity: | 2.50 years |
* | Percentages shown are based on the Fund’s total net assets. |
** | SEC yields are based on SEC guidelines and are calculated for the 30 days ended June 30, 2009. |
# | Not annualized. |
Page 1
Baird Short-Term Bond Fund
Average Annual Total Returns
For the Periods Ended June 30, 2009 | One Year | Since Inception(1) |
Institutional Class | 1.12% | 3.02% |
Barclays Capital 1-3 Year U.S. Government/Credit Bond Index(2) | 4.90% | 4.10% |
(1) | For the period from August 31, 2004 (commencement of operations) to June 30, 2009. |
(2) | The Barclays Capital 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 securities with maturities between one and three years. This index does not reflect any deduction for fees, expenses or taxes. A direct investment in an index is not possible. |
The returns shown in the table above reflect reinvestment of dividends and/or capital gains distributions in additional shares. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Past performance does not guarantee future results. Investment returns and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.
For information about the performance of the Fund as of the most recent month-end, please call 1-866-44BAIRD or visit www.bairdfunds.com. Mutual fund performance changes over time and current performance may be lower or higher than that stated.
Page 2
Baird Short-Term Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 95.4% | |||||||
Asset Backed Securities – 3.9% | |||||||
American Express Credit | |||||||
Account Master Trust: | |||||||
$ | 1,400,000 | Series 2004-5, Class A, | |||||
5.42%, 04/16/2012 | $ | 1,398,817 | |||||
1,050,000 | Series 2005-5, Class A, | ||||||
4.276%, 02/15/2013 | 1,040,925 | ||||||
47,888 | Bombardier Capital | ||||||
Mortgage Securitization, | |||||||
Series 1998-A, Class A3, | |||||||
6.23%, 04/15/2028 | 39,196 | ||||||
413,669 | Capital Auto Receivables | ||||||
Asset Trust, Series | |||||||
2006-SN1A, Class A4B, | |||||||
4.388%, 03/20/2010 | |||||||
(Acquired 09/29/2008 | |||||||
and 11/28/2008; Cost | |||||||
$107,183 and $305,061, | |||||||
respectively) * | 413,669 | ||||||
600,000 | Chase Issuance Trust, | ||||||
Series 2005-A10, Class | |||||||
A10, 4.65%, 12/17/2012 | 619,580 | ||||||
263,749 | CitiFinancial Mortgage | ||||||
Securities, Inc., | |||||||
Series 2004-1, Class AF2, | |||||||
2.645%, 04/25/2034 | 248,784 | ||||||
Countrywide Asset-Backed | |||||||
Certificates: | |||||||
1,483,070 | Series 2006-S7, Class A2, | ||||||
5.571%, 11/25/2035 | 340,001 | ||||||
231,350 | Series 2005-12, Class 1A2, | ||||||
4.847%, 02/25/2036 | 229,818 | ||||||
572,948 | Series 2005-13, Class AF2, | ||||||
5.294%, 04/25/2036 | 561,863 | ||||||
2,000,000 | Series 2006-13, Class 1AF2, | ||||||
5.884%, 01/25/2037 | 1,584,570 | ||||||
2,495,000 | Series 2006-13, Class | ||||||
1AF3, 5.944%, | |||||||
01/25/2037 | 1,080,559 | ||||||
1,500,000 | Series 2006-9, Class 1AF3, | ||||||
5.859%, 10/25/2046 | 462,644 | ||||||
830,557 | Credit Based Asset | ||||||
Servicing and Securities, | |||||||
Series 2005-CB8, Class | |||||||
AF2, 5.303%, 12/25/2035 | 737,600 | ||||||
1,225,000 | Discover Card | ||||||
Master Trust I, | |||||||
Series 2005-2, Class A, | |||||||
4.266%, 04/17/2012 | 1,222,934 | ||||||
3,020,096 | GMAC Mortgage | ||||||
Corporation Loan Trust, | |||||||
Series 2005-HE3, Class | |||||||
A2, 3.526%, 02/25/2036 | 981,541 | ||||||
Green Tree Financial | |||||||
Corporation: | |||||||
125,415 | Series 1996-3, Class A5, | ||||||
7.35%, 05/15/2027 | 117,979 | ||||||
55,541 | Series 1998-2, Class A5, | ||||||
6.24%, 12/01/2028 | 48,407 | ||||||
1,881,345 | Series 1997-5, Class A6, | ||||||
6.82%, 05/15/2029 | 1,752,206 | ||||||
619,923 | Series 1998-3, Class A5, | ||||||
6.22%, 03/01/2030 | 497,339 | ||||||
2,000,000 | Renaissance Home | ||||||
Equity Loan Trust, | |||||||
Series 2007-2, Class AF2, | |||||||
5.675%, 06/25/2037 | 886,966 | ||||||
325,411 | Residential Asset | ||||||
Mortgage Products, Inc., | |||||||
Series 2003-RS7, Class | |||||||
AI6, 5.34%, 08/25/2033 | 254,790 | ||||||
14,520,188 |
The accompanying notes are an integral part of these financial statements.
Page 3
Baird Short-Term Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 95.4% (cont.) | |||||||
Financial – 25.4% | |||||||
$ | 1,000,000 | Allstate Corporation | |||||
Senior Notes, | |||||||
6.20%, 05/16/2014 | $ | 1,048,869 | |||||
2,330,000 | American Express | ||||||
Centurion, | |||||||
0.45%, 07/13/2010 | 2,267,141 | ||||||
American General Finance | |||||||
Corporation Notes: | |||||||
1,099,000 | 8.45%, 10/15/2009 | 1,056,786 | |||||
1,000,000 | 4.00%, 03/15/2011 | 662,646 | |||||
1,000,000 | Ameriprise Financial, Inc., | ||||||
5.35%, 11/15/2010 | 998,162 | ||||||
1,130,000 | Associates Corporation | ||||||
North America | |||||||
Subordinated Debentures, | |||||||
8.15%, 08/01/2009 | 1,130,810 | ||||||
1,460,000 | Axa Financial, Inc., | ||||||
7.75%, 08/01/2010 | 1,464,016 | ||||||
1,000,000 | Bancwest Corporation | ||||||
Subordinated Notes, | |||||||
8.30%, 01/15/2011 | 1,031,877 | ||||||
Bank of Ireland: f | |||||||
500,000 | 2.863%, 12/18/2009 | 495,362 | |||||
1,000,000 | 1.171%, 01/15/2010 | 986,063 | |||||
1,000,000 | Bank of Scotland PLC, | ||||||
1.344%, 12/08/2010 | |||||||
(Acquired 05/14/2009; | |||||||
Cost $935,224) * f | 952,535 | ||||||
225,000 | Bank One Corporation | ||||||
Subordinated Notes, | |||||||
10.00%, 08/15/2010 | 239,280 | ||||||
Bank Tokyo – Mitsubishi | |||||||
UFJ Ltd.: f | |||||||
250,000 | 8.40%, 04/15/2010 | 258,051 | |||||
1,700,000 | 7.40%, 06/15/2011 | 1,749,201 | |||||
251,000 | Bank United Notes, | ||||||
8.00%, 03/15/2009 @ | 125 | ||||||
600,000 | Barclays Bank PLC | ||||||
Senior Unsecured Notes, | |||||||
5.45%, 09/12/2012 f | 625,565 | ||||||
2,750,000 | Barclays Bank PLC | ||||||
Subordinated Notes, | |||||||
7.40%, 12/15/2009 f | 2,799,976 | ||||||
1,000,000 | Bear Stearns Cos., Inc., | ||||||
7.625%, 12/07/2009 | 1,025,326 | ||||||
500,000 | Charles Schwab | ||||||
Corporation Senior Notes, | |||||||
8.05%, 03/01/2010 | 515,934 | ||||||
Cit Group, Inc. | |||||||
Senior Notes: | |||||||
2,000,000 | 4.25%, 02/01/2010 | 1,795,576 | |||||
700,000 | 4.75%, 12/15/2010 | 549,506 | |||||
Citigroup, Inc.: | |||||||
100,000 | 7.25%, 10/31/2010 | 99,589 | |||||
200,000 | 6.50%, 01/18/2011 | 203,093 | |||||
723,000 | 5.125%, 02/14/2011 | 720,939 | |||||
850,000 | Compass Bank | ||||||
Subordinated Notes, | |||||||
8.10%, 08/15/2009 | 849,327 | ||||||
388,000 | Corestates Capital Trust I, | ||||||
8.00%, 12/15/2026 | |||||||
(Acquired 01/26/2006 | |||||||
and 05/31/2006; | |||||||
Cost $205,803 and | |||||||
$193,454, respectively) * | 254,113 | ||||||
1,000,000 | Countrywide Home | ||||||
Loans Notes, | |||||||
4.125%, 09/15/2009 | 1,003,260 | ||||||
497,000 | Deutsche Bank Trust | ||||||
Corporation Subordinated | |||||||
Notes, 7.25%, 10/15/2011 | 524,039 |
The accompanying notes are an integral part of these financial statements.
Page 4
Baird Short-Term Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 95.4% (cont.) | |||||||
Financial – 25.4% (cont.) | |||||||
Export-Import Bank | |||||||
Korea Notes: f | |||||||
$ | 350,000 | 4.625%, 03/16/2010 | $ | 351,414 | |||
815,000 | 5.125%, 02/14/2011 | 825,654 | |||||
2,190,000 | Fifth Third Bank, | ||||||
4.20%, 02/23/2010 | 2,188,397 | ||||||
1,000,000 | First Empire | ||||||
Capital Trust I, | |||||||
8.234%, 02/01/2027 | |||||||
(Callable 08/24/2009) | 659,414 | ||||||
1,500,000 | First Hawaiian Capital | ||||||
Trust I, Series B, | |||||||
8.343%, 07/01/2027 | 1,145,937 | ||||||
1,500,000 | First National Bank of | ||||||
Omaha Subordinated Notes, | |||||||
7.32%, 12/01/2010 | 1,472,728 | ||||||
800,000 | First Union Capital I, | ||||||
Series A, 7.935%, | |||||||
01/15/2027 (Callable | |||||||
08/24/2009) | 724,694 | ||||||
2,000,000 | GE Global Insurance | ||||||
Holding Corp., | |||||||
7.50%, 06/15/2010 | 1,995,574 | ||||||
250,000 | General Electric Capital | ||||||
Corporation Senior | |||||||
Unsecured Notes, | |||||||
6.00%, 06/15/2012 | 262,798 | ||||||
250,000 | Genworth Global | ||||||
Funding Trust, | |||||||
5.125%, 03/15/2011 | 241,297 | ||||||
787,000 | GMAC LLC, | ||||||
7.50%, 12/31/2013 | |||||||
(Acquired 09/08/2006 | |||||||
and 08/21/2007; Cost | |||||||
$585,844 and $402,679, | |||||||
respectively) * | 609,925 | ||||||
Goldman Sachs | |||||||
Group, Inc.: | |||||||
273,000 | 7.80%, 01/28/2010 | 282,434 | |||||
1,440,000 | 6.875%, 01/15/2011 | 1,522,380 | |||||
1,000,000 | Goldman Sachs Group LP | ||||||
Senior Unsecured Notes, | |||||||
8.00%, 03/01/2013 | |||||||
(Acquired 04/16/2009; | |||||||
Cost $1,025,738) * | 1,083,048 | ||||||
770,000 | Hartford Life | ||||||
Global Funding, | |||||||
2.111%, 09/15/2009 | 766,871 | ||||||
1,000,000 | HSBC Finance Corporation | ||||||
Senior Unsecured Notes, | |||||||
1.411%, 03/12/2010 | 983,564 | ||||||
1,500,000 | HSBC USA Capital Trust II, | ||||||
8.38%, 05/15/2027 | |||||||
(Callable 08/24/2009) | |||||||
(Acquired 11/06/2007; | |||||||
Cost $1,551,337) * | 1,358,826 | ||||||
1,300,000 | Huntington National Bank | ||||||
Notes, 8.00%, 04/01/2010 | 1,300,267 | ||||||
1,000,000 | ING Bank Notes, | ||||||
1.569%, 08/24/2009 | |||||||
(Acquired 04/23/2009; | |||||||
Cost $997,744) * f | 1,000,507 | ||||||
2,000,000 | ING SEC Life | ||||||
Institutional Fund Senior | |||||||
Unsecured Notes, | |||||||
1.321%, 01/15/2010 | 2,002,158 | ||||||
1,000,000 | ING USA Global | ||||||
Funding Notes, | |||||||
1.358%, 10/01/2010 | 967,486 | ||||||
Invesco Ltd.: f | |||||||
1,515,000 | 5.625%, 04/17/2012 | 1,395,218 | |||||
325,000 | 5.375%, 02/27/2013 | 284,169 |
The accompanying notes are an integral part of these financial statements.
Page 5
Baird Short-Term Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 95.4% (cont.) | |||||||
Financial – 25.4% (cont.) | |||||||
$ | 500,000 | J.P. Morgan Chase & Co. | |||||
Senior Unsecured Notes, | |||||||
4.65%, 06/01/2014 | $ | 498,681 | |||||
2,180,000 | John Hancock Global | ||||||
Funding II, 7.90%, | |||||||
07/02/2010 (Acquired | |||||||
02/24/2009 and | |||||||
03/24/2009; Cost | |||||||
$2,057,133 and $177,142, | |||||||
respectively) * | 2,235,267 | ||||||
2,000,000 | Kookmin Bank, | ||||||
7.25%, 05/14/2014 | |||||||
(Acquired 05/26/2009; | |||||||
Cost $2,077,091) * f | 2,064,894 | ||||||
625,000 | Korea Development Bank | ||||||
Senior Unsecured Notes: | |||||||
4.625%, 09/16/2010 f | 630,053 | ||||||
2,500,000 | M&I Marshall & Ilsley | ||||||
Bank, 2.93%, 06/16/2010 | 2,402,488 | ||||||
2,671,000 | MBNA Capital, Series A, | ||||||
8.278%, 12/01/2026 | |||||||
(Callable 08/24/2009) | 2,250,318 | ||||||
1,067,000 | Mercantile Bankshares | ||||||
Corporation Subordinated | |||||||
Notes, Series B, | |||||||
4.625%, 04/15/2013 | 962,398 | ||||||
1,500,000 | Merrill Lynch & Co., | ||||||
4.966%, 05/12/2010 | 1,491,560 | ||||||
2,000,000 | Monumental Global | ||||||
Funding II, 4.375%, | |||||||
07/30/2009 (Acquired | |||||||
12/15/2008 and | |||||||
02/23/2009; Cost | |||||||
$996,622 and $997,929, | |||||||
respectively) * | 1,999,950 | ||||||
1,020,000 | The Mony Group, Inc., | ||||||
8.35%, 03/15/2010 | 1,053,657 | ||||||
Morgan Stanley: | |||||||
2,636,000 | 8.00%, 06/15/2010 | 2,706,516 | |||||
355,000 | 6.60%, 04/01/2012 | 375,858 | |||||
2,560,000 | National Australia Bank | ||||||
Ltd. Subordinated Notes, | |||||||
Series A, 8.60%, | |||||||
05/19/2010 f | 2,702,720 | ||||||
1,730,000 | National Westminster Bank | ||||||
Subordinated Notes, | |||||||
7.375%, 10/01/2009 f | 1,711,134 | ||||||
1,300,000 | Nationwide Life Global | ||||||
Funding, 5.35%, | |||||||
03/15/2011 (Acquired | |||||||
03/24/2009; Cost | |||||||
$1,191,618)* | 1,283,598 | ||||||
2,273,000 | NB Capital Trust IV, | ||||||
8.25%, 04/15/2027 | |||||||
(Callable 08/24/2009) | 1,908,620 | ||||||
1,000,000 | North Fork Capital | ||||||
Trust II, | |||||||
8.00%, 12/15/2027 | |||||||
(Callable 08/24/2009) | 725,927 | ||||||
1,500,000 | Northern Rock PLC, | ||||||
4.583%, 10/20/2009 | |||||||
(Acquired 01/07/2009; | |||||||
Cost $1,470,166) * f | 1,491,855 | ||||||
1,000,000 | PNC Funding | ||||||
Corporation, | |||||||
7.50%, 11/01/2009 | 1,013,742 | ||||||
2,000,000 | Pooled Funding Trust II, | ||||||
2.625%, 03/30/2012 | |||||||
(Acquired 03/27/2009; | |||||||
Cost $1,998,800) * | 2,003,150 |
The accompanying notes are an integral part of these financial statements.
Page 6
Baird Short-Term Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 95.4% (cont.) | |||||||
Financial – 25.4% (cont.) | |||||||
Pricoa Global Funding I: | |||||||
$ | 250,000 | 2.046%, 12/15/2009 | |||||
(Acquired 02/06/2009; | |||||||
Cost $244,855) * | $ | 248,617 | |||||
475,000 | 1.341%, 01/15/2010 | ||||||
(Acquired 06/23/2009; | |||||||
Cost $464,340) * | 471,841 | ||||||
2,010,000 | 4.20%, 01/15/2010 | ||||||
(Acquired 03/05/2009 | |||||||
and 04/02/2009; | |||||||
Cost $1,082,698 and | |||||||
$871,807, respectively) * | 1,969,422 | ||||||
1,800,000 | Principal Financial Group | ||||||
(AU) Senior Notes, | |||||||
8.20%, 08/15/2009 | |||||||
(Acquired 05/14/2008 | |||||||
and 11/28/2008; Cost | |||||||
$502,353 and $1,301,145, | |||||||
respectively) * f | 1,807,360 | ||||||
2,000,000 | Protective Life Secured | ||||||
Trust, 4.00%, 04/01/2011 | 1,975,616 | ||||||
1,000,000 | Rabobank Nederland | ||||||
Global Senior Unsecured | |||||||
Notes, 4.20%, 05/13/2014 | |||||||
(Acquired 05/06/2009; | |||||||
Cost $998,170) * f | 997,435 | ||||||
1,130,000 | Santander Central | ||||||
Hispano Issuances, | |||||||
7.625%, 11/03/2009 f | 1,146,646 | ||||||
550,000 | Santander Financial | ||||||
Issuances, | |||||||
6.375%, 02/15/2011 f | 548,849 | ||||||
1,724,000 | Sovereign Bancorp, Inc., | ||||||
4.80%, 09/01/2010 | 1,683,995 | ||||||
2,000,000 | Sun Life Financial Global | ||||||
Funding, 1.663%, | |||||||
07/06/2010 (Acquired | |||||||
01/30/2009 and | |||||||
02/17/2009; Cost | |||||||
$965,828 and $954,384, | |||||||
respectively) * | 1,941,028 | ||||||
825,000 | Toll Road Inv. Part II, | ||||||
Series 1999B, 0.00%, | |||||||
02/15/2010 (Acquired | |||||||
03/10/2009; | |||||||
Cost $795,742) * ^ | 793,181 | ||||||
Union Planters | |||||||
Corporation Notes: | |||||||
750,000 | 4.375%, 12/01/2010 | 726,776 | |||||
1,075,000 | 7.75%, 03/01/2011 | 1,043,412 | |||||
95,598,491 | |||||||
Industrial – 19.0% | |||||||
2,000,000 | Alcoa, Inc., | ||||||
6.50%, 06/01/2011 | 2,038,950 | ||||||
1,112,000 | Allied Waste North | ||||||
America Inc. Senior | |||||||
Unsecured Notes, | |||||||
6.50%, 11/15/2010 | 1,131,460 | ||||||
1,000,000 | AOL Time Warner, Inc., | ||||||
6.75%, 04/15/2011 | 1,046,571 | ||||||
2,605,000 | British Sky | ||||||
Broadcasting PLC, | |||||||
8.20%, 07/15/2009 f | 2,606,537 | ||||||
2,225,000 | British Telecom PLC Notes, | ||||||
8.625%, 12/15/2010 f | 2,363,110 | ||||||
1,825,000 | CBS Corporation, | ||||||
7.70%, 07/30/2010 | 1,879,093 | ||||||
500,000 | Clear Channel | ||||||
Communications Senior | |||||||
Notes, 7.65%, 09/15/2010 | 295,000 |
The accompanying notes are an integral part of these financial statements.
Page 7
Baird Short-Term Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 95.4% (cont.) | |||||||
Industrial – 19.0% (cont.) | |||||||
$ | 1,660,000 | Comcast Holdings | |||||
Corporation, | |||||||
10.625%, 07/15/2012 | $ | 1,942,200 | |||||
2,000,000 | Computer Associates, | ||||||
Inc., 4.75%, 12/01/2009 | 2,007,240 | ||||||
725,000 | Computer Sciences | ||||||
Corporation Senior Notes, | |||||||
7.375%, 06/15/2011 | 770,446 | ||||||
2,000,000 | Conagra Foods, Inc., | ||||||
6.75%, 09/15/2011 | 2,138,786 | ||||||
2,581,000 | COX Communications | ||||||
Inc. Notes, | |||||||
7.875%, 08/15/2009 | 2,596,463 | ||||||
1,250,000 | CVS Caremark | ||||||
Corporation Senior | |||||||
Unsecured Notes, | |||||||
1.561%, 06/01/2010 | |||||||
(Callable 08/24/2009) | 1,241,136 | ||||||
2,875,000 | Deutsche Telekom | ||||||
International Finance BV, | |||||||
8.50%, 06/15/2010 f | 3,023,537 | ||||||
662,000 | Devon Energy | ||||||
Corporation Debentures, | |||||||
10.125%, 11/15/2009 | 672,753 | ||||||
2,000,000 | Donnelley (R.R.) & Sons | ||||||
Co. Senior Unsecured | |||||||
Notes, 4.95%, 05/15/2010 | 2,002,734 | ||||||
500,000 | Fiserv, Inc., | ||||||
6.125%, 11/20/2012 | 518,998 | ||||||
1,660,000 | France Telecom S.A., | ||||||
7.75%, 03/01/2011 f | 1,795,343 | ||||||
2,000,000 | General Electric Company, | ||||||
5.00%, 02/01/2013 | 2,081,032 | ||||||
2,250,000 | Health Care Service | ||||||
Corporation Senior | |||||||
Unsecured Notes, 7.75%, | |||||||
06/15/2011 (Acquired | |||||||
06/15/2009 and 06/17/2009; | |||||||
Cost $2,139,740 and | |||||||
$265,438, respectively) * | 2,355,151 | ||||||
1,500,000 | Historic Time | ||||||
Warner Inc., | |||||||
9.125%, 01/15/2013 | 1,651,503 | ||||||
2,000,000 | Home Depot, Inc., | ||||||
3.75%, 09/15/2009 | 2,005,024 | ||||||
625,000 | IBM Corporation Senior | ||||||
Unsecured Notes, | |||||||
7.50%, 06/15/2013 | 711,466 | ||||||
675,000 | International Paper | ||||||
Company Notes, | |||||||
4.00%, 04/01/2010 | 676,608 | ||||||
595,000 | Johnson Controls Inc. | ||||||
Senior Unsecured Notes, | |||||||
5.25%, 01/15/2011 | 601,452 | ||||||
1,625,000 | Kinder Morgan Energy | ||||||
Partners Senior Unsecured | |||||||
Notes, 6.75%, 03/15/2011 | 1,703,128 | ||||||
2,000,000 | Koninslijke KPN NV | ||||||
Senior Unsecured Notes, | |||||||
8.00%, 10/01/2010 f | 2,098,554 | ||||||
200,000 | Kraft Foods Inc. Senior | ||||||
Unsecured Notes, | |||||||
5.625%, 11/01/2011 | 212,495 | ||||||
2,660,000 | Motiva Enterprises LLC | ||||||
Senior Unsecured Notes, | |||||||
5.20%, 09/15/2012 | |||||||
(Acquired 05/13/2009 and | |||||||
06/11/2009; Cost | |||||||
$2,212,277 and $455,943, | |||||||
respectively) * | 2,730,149 |
The accompanying notes are an integral part of these financial statements.
Page 8
Baird Short-Term Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 95.4% (cont.) | |||||||
Industrial – 19.0% (cont.) | |||||||
$ | 1,000,000 | New Cingular Wireless | |||||
Service, Inc. Senior | |||||||
Unsecured Notes, | |||||||
7.875%, 03/01/2011 | $ | 1,078,465 | |||||
1,000,000 | New York | ||||||
Telephone Company, | |||||||
6.125%, 01/15/2010 | 1,016,825 | ||||||
1,000,000 | News America Inc., | ||||||
4.75%, 03/15/2010 | 1,010,283 | ||||||
2,400,000 | PEMEX Project | ||||||
Funding Master Trust, | |||||||
9.125%, 10/13/2010 | 2,589,120 | ||||||
2,000,000 | Posco, | ||||||
8.75%, 03/26/2014 | |||||||
(Acquired 03/19/2009; | |||||||
Cost $1,984,160) * f | 2,211,046 | ||||||
700,000 | Reed Elsevier Capital Inc., | ||||||
4.821%, 06/15/2010 | 671,250 | ||||||
2,000,000 | Rio Tinto Alcan, Inc., | ||||||
5.75%, 06/01/2035 | 2,072,300 | ||||||
Telecom Italia Capital: f | |||||||
1,250,000 | 4.00%, 01/15/2010 | 1,255,992 | |||||
120,000 | 5.25%, 11/15/2013 | 117,671 | |||||
375,000 | Thomson Reuters | ||||||
Corporation, | |||||||
6.20%, 01/05/2012 f | 390,601 | ||||||
475,000 | Tyco International Finance, | ||||||
6.375%, 10/15/2011 f | 500,523 | ||||||
21,165 | United AirLines, Inc. | ||||||
Pass-Thru Certificates, | |||||||
Series 2001-1, Class A-2, | |||||||
6.201%, 12/31/2049 | 20,953 | ||||||
Unitedhealth Group, Inc.: | |||||||
325,000 | 4.125%, 08/15/2009 | 325,485 | |||||
1,000,000 | 1.705%, 06/21/2010 | ||||||
(Callable 09/21/2009) | 990,562 | ||||||
1,500,000 | Verizon Communications, | ||||||
7.25%, 12/01/2010 | 1,597,113 | ||||||
600,000 | Verizon New Jersey, | ||||||
Inc., Series A, | |||||||
5.875%, 01/17/2012 | 628,962 | ||||||
Vodafone Group PLC: f | |||||||
1,105,000 | 7.75%, 02/15/2010 | 1,142,360 | |||||
1,000,000 | 5.50%, 06/15/2011 | 1,052,194 | |||||
910,000 | Waste Management, Inc., | ||||||
7.65%, 03/15/2011 | 929,523 | ||||||
Wellpoint, Inc.: | |||||||
1,700,000 | 4.25%, 12/15/2009 | 1,720,198 | |||||
300,000 | 6.80%, 08/01/2012 | 313,101 | |||||
2,000,000 | Weyerhaeuser Company, | ||||||
5.25%, 12/15/2009 | 2,010,160 | ||||||
1,000,000 | Wyeth, | ||||||
6.95%, 03/15/2011 | 1,082,688 | ||||||
71,624,294 | |||||||
Mortgage Backed Securities – 13.4% | |||||||
702,001 | Bank of America | ||||||
Alternative Loan Trust, | |||||||
Series 2003-4, Class 2A1, | |||||||
5.00%, 06/25/2018 | 691,252 | ||||||
421,801 | Chase Commercial Mortgage | ||||||
Securities Corporation, | |||||||
Series 1999-2, Class A2, | |||||||
7.198%, 01/15/2032 | 423,896 | ||||||
Citicorp Mortgage | |||||||
Securities, Inc.: | |||||||
602,837 | Series 2004-3, Class A2, | ||||||
5.25%, 05/25/2034 | 605,725 | ||||||
351,253 | Series 2004-4, Class A2, | ||||||
5.25%, 06/25/2034 | 348,184 | ||||||
Countrywide Alternative | |||||||
Loan Trust: | |||||||
1,016,552 | Series 2005-50CB, Class | ||||||
4A1, 5.00%, 11/25/2020 | 796,664 |
The accompanying notes are an integral part of these financial statements.
Page 9
Baird Short-Term Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 95.4% (cont.) | |||||||
Mortgage Backed Securities – 13.4% (cont.) | |||||||
$ | 2,622,334 | Series 2005-34CB, Class | |||||
1A6, 5.50%, 09/25/2035 | $ | 2,188,685 | |||||
659,651 | Series 2005-73CB, Class | ||||||
1A7, 5.50%, 01/25/2036 | 486,539 | ||||||
2,701,049 | Series 2006-28CB, Class | ||||||
A17, 6.00%, 10/25/2036 | 1,808,686 | ||||||
Deutsche Alternative | |||||||
Securities Inc. Mortgage: | |||||||
258,094 | Series 2003-3, Class 2A5, | ||||||
5.00%, 10/25/2033 | 249,483 | ||||||
946,179 | Series 2005-4, Class A2, | ||||||
5.05%, 09/25/2035 | 894,482 | ||||||
528,942 | DLJ Commercial | ||||||
Mortgage Corporation, | |||||||
Series 1999-CG3, Class | |||||||
A1B, 7.34%, 10/10/2032 | 528,361 | ||||||
2,717,920 | Federal Home Loan Bank, | ||||||
Series 00-0582, Class H, | |||||||
4.75%, 10/25/2010 | 2,802,855 | ||||||
Federal Home Loan | |||||||
Mortgage Corporation | |||||||
(FHLMC): | |||||||
16,816 | Series 2548, Class HA, | ||||||
4.50%, 01/15/2010 | 16,868 | ||||||
1,095,512 | Series 2672, Class QR, | ||||||
4.00%, 09/15/2010 | 1,132,167 | ||||||
406,012 | Series 2835, Class VK, | ||||||
5.50%, 11/15/2012 | 412,524 | ||||||
374,280 | Series R015, Class AN, | ||||||
3.75%, 02/15/2013 | 379,308 | ||||||
645,250 | Series 3033, Class LU, | ||||||
5.50%, 03/15/2013 | 680,045 | ||||||
1,920,928 | Series 3124, Class VP, | ||||||
6.00%, 06/15/2014 | 2,047,874 | ||||||
1,920,587 | Series R014, Class AL, | ||||||
5.50%, 10/15/2014 | 1,960,563 | ||||||
1,297,416 | Series R001, Class AE, | ||||||
4.375%, 04/15/2015 | 1,331,746 | ||||||
242,633 | Series 2789, Class VM, | ||||||
5.50%, 04/15/2015 | 253,866 | ||||||
93,550 | Series 2390, Class PW, | ||||||
6.00%, 04/15/2015 | 93,657 | ||||||
1,298,645 | Series 2857, Class VA, | ||||||
5.00%, 09/15/2015 | 1,378,302 | ||||||
81,853 | Series 2541, Class JB, | ||||||
5.00%, 02/15/2016 | 83,257 | ||||||
5,595,075 | Series R007, Class AC, | ||||||
5.875%, 05/15/2016 | 5,741,432 | ||||||
893,910 | Series 2910, Class BD, | ||||||
4.50%, 11/15/2018 | 929,648 | ||||||
36,730 | Series 5, Class B, | ||||||
1.08%, 05/15/2019 | 35,796 | ||||||
376,077 | Series 2970, Class DA, | ||||||
5.50%, 01/15/2023 | 390,246 | ||||||
Federal National Mortgage | |||||||
Association (FNMA): | |||||||
385,955 | 5.50%, 07/01/2015 | 403,136 | |||||
411,477 | Series 2003-27, Class OJ, | ||||||
5.00%, 07/25/2015 | 416,883 | ||||||
1,594,072 | Series 2002-74, Class TD, | ||||||
5.00%, 12/25/2015 | 1,613,208 | ||||||
549,540 | Series 2003-24, Class LC, | ||||||
5.00%, 12/25/2015 | 559,910 | ||||||
537,637 | Series 2006-B1 – Class AB, | ||||||
6.00%, 06/25/2016 | 558,637 | ||||||
3,194,096 | Series 2004-W6, Class 1A4, | ||||||
5.50%, 07/25/2034 | 2,990,345 | ||||||
1,283,872 | Series 2004-W6, Class 1A6, | ||||||
5.50%, 07/25/2034 | 1,341,245 | ||||||
3,463,548 | Series 2004-W10, Class | ||||||
A24, 5.00%, 08/25/2034 | 3,433,134 |
The accompanying notes are an integral part of these financial statements.
Page 10
Baird Short-Term Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 95.4% (cont.) | |||||||
Mortgage Backed Securities – 13.4% (cont.) | |||||||
$ | 1,605,528 | GMAC Commercial | |||||
Mortgage Securities Inc, | |||||||
Series 2001-C1, Class A2, | |||||||
6.465%, 04/15/2034 | $ | 1,632,304 | |||||
1,379,193 | J.P. Morgan Alternative | ||||||
Loan Trust, | |||||||
Series 2006-S2, Class A2, | |||||||
5.81%, 05/25/2036 | 1,185,643 | ||||||
465,381 | Merrill Lynch Mortgage | ||||||
Investors Inc., | |||||||
Series 2005-A8, Class | |||||||
A1C1, 5.25%, 08/25/2036 | 407,452 | ||||||
556,009 | Residential Accredit Loans | ||||||
Inc., Series 2003-QS17, | |||||||
Class CB3, 5.50%, | |||||||
09/25/2033 | 528,720 | ||||||
Salomon Brothers Mortgage | |||||||
Securities VII: | |||||||
1,853,734 | Series 2000-C1, Class A2, | ||||||
7.52%, 12/18/2009 | 1,865,091 | ||||||
959,357 | Series 2000-C2, Class A2, | ||||||
7.455%, 07/18/2033 | 973,435 | ||||||
2,744,001 | Series 2001-C2, Class A3, | ||||||
6.50%, 11/13/2036 | 2,816,294 | ||||||
Washington Mutual, Inc. | |||||||
Pass-Thru Certificates: | |||||||
476,255 | Series 2004-CB4, Class | ||||||
21A, 5.50%, 12/25/2019 | 424,426 | ||||||
441,912 | Series 2004-CB4, Class | ||||||
22A, 6.00%, 12/25/2019 | 398,846 | ||||||
50,240,820 | |||||||
Taxable Municipal Bonds – 1.0% | |||||||
388,945 | Educational Enhancement | ||||||
Funding Corporation, | |||||||
6.72%, 06/01/2025 | 340,961 | ||||||
370,000 | Missouri State | ||||||
Housing Development | |||||||
Revenue Bond, | |||||||
5.74%, 03/01/2037 | 369,512 | ||||||
1,750,000 | Pennsylvania State | ||||||
Turnpike Commission, | |||||||
5.29%, 10/15/2009 | 1,753,360 | ||||||
680,000 | Pomona California | ||||||
Public Financing Authority | |||||||
Lease Revenue, | �� | ||||||
4.60%, 10/01/2010 | 680,551 | ||||||
265,000 | Redding California | ||||||
Redevelopment Agency | |||||||
Tax Allocation, | |||||||
6.00%, 09/01/2010 | 267,528 | ||||||
255,000 | Richmond Joint Powers | ||||||
Financing Authority | |||||||
Tax Allocation, | |||||||
7.35%, 09/01/2010 | 258,381 | ||||||
144,792 | Tobacco Settlement | ||||||
Financing Corporation, | |||||||
Series 2001-A, Class A, | |||||||
6.36%, 05/15/2025 | 133,335 | ||||||
3,803,628 | |||||||
Utilities – 8.2% | |||||||
2,000,000 | Allegheny Energy Supply | ||||||
Co. Senior Unsecured Notes, | |||||||
7.80%, 03/15/2011 | 2,069,146 | ||||||
600,000 | Baltimore Gas & Electric | ||||||
Co. Senior Unsecured Notes, | |||||||
6.125%, 07/01/2013 | 626,141 | ||||||
940,000 | Cilcorp Inc. Senior Notes, | ||||||
8.70%, 10/15/2009 | 921,200 | ||||||
474,000 | Commonwealth Edison | ||||||
Co., Series 98, | |||||||
6.15%, 03/15/2012 | 503,187 |
The accompanying notes are an integral part of these financial statements.
Page 11
Baird Short-Term Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 95.4% (cont.) | |||||||
Utilities – 8.2% (cont.) | |||||||
$ | 2,000,000 | Constellation Energy | |||||
Group Inc. Senior Notes, | |||||||
6.125%, 09/01/2009 | $ | 2,008,622 | |||||
500,000 | Duke Energy Corp., | ||||||
6.30%, 02/01/2014 | 539,819 | ||||||
1,000,000 | Energy Transfer Partners | ||||||
L.P., 9.70%, 03/15/2019 | 1,148,045 | ||||||
2,000,000 | Exelon Corporation, | ||||||
6.75%, 05/01/2011 | 2,087,532 | ||||||
1,733,519 | GG1C Funding | ||||||
Corporation Secured Notes, | |||||||
5.129%, 01/15/2014 | |||||||
(Callable 08/24/2009) | |||||||
(Acquired 04/02/2009; | |||||||
Cost $1,645,672) * | 1,595,444 | ||||||
NiSource Finance | |||||||
Corporation: | |||||||
550,000 | 2.915%, 11/23/2009 | ||||||
(Callable 08/24/2009) | 545,632 | ||||||
2,000,000 | 7.875%, 11/15/2010 | 2,065,778 | |||||
1,500,000 | Northern Border Pipeline | ||||||
Co., 7.75%, 09/01/2009 | 1,512,728 | ||||||
1,000,000 | Pacific Gas & Electric | ||||||
Company Senior | |||||||
Unsecured Notes, | |||||||
1.598%, 06/10/2010 | 1,004,938 | ||||||
1,670,000 | Pepco Holdings, Inc. | ||||||
Senior Notes, | |||||||
2.83%, 06/01/2010 | |||||||
(Callable 08/24/2009) | 1,637,756 | ||||||
2,000,000 | PPL Energy Supply, | ||||||
LLC Senior Notes, | |||||||
6.40%, 11/01/2011 | 2,106,492 | ||||||
1,000,000 | PSEG Power LLC, | ||||||
6.95%, 06/01/2012 | 1,076,573 | ||||||
2,300,000 | Rockies Express Pipeline | ||||||
LLC, 5.776%, 08/20/2009 | |||||||
(Acquired 02/25/2009 | |||||||
and 04/01/2009; Cost | |||||||
$1,994,704 and $300,106, | |||||||
respectively) * | 2,300,219 | ||||||
1,969,000 | Sempra Energy, | ||||||
7.95%, 03/01/2010 | 2,039,642 | ||||||
2,500,000 | Spectra Energy Capital | ||||||
Senior Unsecured Notes, | |||||||
7.50%, 10/01/2009 | 2,528,257 | ||||||
Williams Companies, Inc. | |||||||
Senior Unsecured Notes: | |||||||
1,400,000 | 6.375%, 10/01/2010 | ||||||
(Acquired 07/09/2008; | |||||||
Cost $1,307,647) * | 1,399,727 | ||||||
1,000,000 | 8.125%, 03/15/2012 | 1,036,350 | |||||
30,753,228 | |||||||
U.S. Government Agency Issues – 14.4% | |||||||
2,000,000 | Federal Home Loan Bank, | ||||||
1.625%, 07/27/2011 | 2,011,004 | ||||||
5,000,000 | Federal Farm Credit Bank, | ||||||
2.125%, 06/18/2012 | 5,016,440 | ||||||
Federal National Mortgage | |||||||
Association (FNMA): | |||||||
10,500,000 | 3.625%, 02/12/2013 | 11,039,983 | |||||
13,150,000 | 4.375%, 03/15/2013 | 14,141,405 | |||||
21,750,000 | 2.75%, 03/13/2014 | 21,703,455 | |||||
53,912,287 | |||||||
U.S. Treasury Obligations – 10.1% | |||||||
36,500,000 | U.S. Treasury Bond, | ||||||
3.125%, 08/31/2013 | 37,814,584 | ||||||
Total Long-Term | |||||||
Investments | |||||||
(Cost $367,179,688) | 358,267,520 |
The accompanying notes are an integral part of these financial statements.
Page 12
Baird Short-Term Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Shares | Value | ||||||
SHORT-TERM INVESTMENTS – 6.5% | |||||||
Money Market Fund – 6.5% | |||||||
24,410,330 | Short-Term Investment | ||||||
Company Liquid Assets | |||||||
Portfolio – AIM Fund | $ | 24,410,330 | |||||
Total Short-Term | |||||||
Investments | |||||||
(Cost $24,410,330) | 24,410,330 | ||||||
Principal | |||||||
Amount | |||||||
INVESTMENTS PURCHASED | |||||||
WITH CASH PROCEEDS FROM | |||||||
SECURITIES LENDING – 25.9% | |||||||
Commercial Paper – 0.4% | |||||||
$ | 1,301,909 | Atlantic East Funding LLC, | |||||
3.059%, 03/25/10 # ** | 1,301,909 | ||||||
1,301,909 | |||||||
Corporate Bond – 0.4% | |||||||
1,598,900 | Svenska Handelsbanken, | ||||||
4.418%, 08/06/09 f | 1,598,900 | ||||||
1,598,900 | |||||||
Shares | |||||||
Investment Companies – 25.1% | |||||||
94,149,265 | Mount Vernon | ||||||
Securities Lending | |||||||
Trust Prime Portfolio | 94,149,265 | ||||||
71,456 | Reserve Primary Fund # ** | 71,456 | |||||
94,220,721 | |||||||
Total Investments | |||||||
Purchased With Cash | |||||||
Proceeds From | |||||||
Securities Lending | |||||||
(Cost $97,121,530) | 97,121,530 | ||||||
Total Investments | |||||||
(Cost $488,711,548) – | |||||||
127.8% | 479,799,380 | ||||||
Liabilities in Excess of | |||||||
Other Assets – (27.8)% | (104,210,995 | ) | |||||
TOTAL NET | |||||||
ASSETS – 100.0% | $ | 375,588,385 |
* | Restricted Security Deemed Liquid |
** | Illiquid Security |
f | Foreign Security |
^ | Non-Income Producing |
# | Priced at Fair Value by the Valuation Committee as delegated by the Baird Funds’ Board of Directors |
@ | Security in default |
The accompanying notes are an integral part of these financial statements.
Page 13
Baird Short-Term Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
SFAS 157 – Summary of Fair Value Exposure at June 30, 2009
As adopted by the Fund, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“SFAS 157”) defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. Under SFAS 157, various inputs are used in determining the value of the Fund’s investments. These inputs are summarized into three broad levels and described below:
Level 1 – | Quoted prices in active markets for identical securities. |
Level 2 – | Other significant observable inputs (including quoted prices for similar securities, quoted prices for identical securities in inactive markets, dealer indications, interest rates, yield curves, benchmark yields, issuer spreads, prepayment speeds, cash flows, credit risk, default rates, information about issuers, sectors and markets, inputs corroborated by observable market data, etc.) |
Level 3 – | Significant unobservable inputs (including the Fund’s own assumptions about the assumptions that market participants would use in pricing the security). |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Fund’s investments as of June 30, 2009:
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Fixed Income | ||||||||||||||||
Asset Backed Securities | $ | — | $ | 14,520,188 | $ | — | $ | 14,520,188 | ||||||||
Corporate Debt Securities | — | 197,976,013 | — | 197,976,013 | ||||||||||||
Mortgage Backed Securities | — | 50,240,820 | — | 50,240,820 | ||||||||||||
Taxable Municipal Bonds | — | 3,803,628 | — | 3,803,628 | ||||||||||||
U.S. Government Agency Issues | — | 53,912,287 | — | 53,912,287 | ||||||||||||
U.S. Treasury Obligations | — | 37,814,584 | — | 37,814,584 | ||||||||||||
Total Fixed Income | — | 358,267,520 | — | 358,267,520 | ||||||||||||
Short-Term Investments | ||||||||||||||||
Money Market Mutual Funds | 24,410,330 | — | — | 24,410,330 | ||||||||||||
Total Short-Term Investments | 24,410,330 | — | — | 24,410,330 | ||||||||||||
Investments Purchased With Cash | ||||||||||||||||
Proceeds From Securities Lending | ||||||||||||||||
Commercial Paper | — | 1,301,909 | — | 1,301,909 | ||||||||||||
Corporate Bonds | — | 1,598,900 | — | 1,598,900 | ||||||||||||
Money Market Mutual Funds | 94,149,265 | — | 71,456 | 94,220,721 | ||||||||||||
Total Investments Purchased With Cash | ||||||||||||||||
Proceeds From Securities Lending | 94,149,265 | 2,900,809 | 71,456 | 97,121,530 | ||||||||||||
Total Investments in Securities | $ | 118,559,595 | $ | 361,168,329 | $ | 71,456 | $ | 479,799,380 |
Page 14
Baird Short-Term Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Level 3 Reconciliation Disclosure
Following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value.
Description | Investments in Securities | |||
Balance as of December 31, 2008 | $ | 725,642 | ||
Accrued discounts/premiums | — | |||
Realized gain (loss) | — | |||
Change in unrealized appreciation (depreciation) | — | |||
Net purchases (sales/paydowns) | (80,022 | ) | ||
Transfers in and/or out of Level 3 * | (574,164 | ) | ||
Balance as of June 30, 2009 | $ | 71,456 | ||
Change in unrealized appreciation (depreciation) during | ||||
the year for level 3 investments held at June 30, 2009. | — |
* | The information used in the above reconciliation represents fiscal year to date activity for any investments identified as using Level 3 inputs at either the beginning or end of the current fiscal period. Transfers in or out of Level 3 represents either the beginning value (for transfers in) or ending value (for transfers out) of any security or instrument where a change in the pricing level occurred from the beginning to the end of the period. |
Page 15
Baird Intermediate Bond Fund
The Baird Intermediate Bond Fund seeks an annual rate of total return, before Fund expenses, greater than the annual rate of total return of the Barclays Capital Intermediate U.S. Government/Credit Bond Index. The Barclays Capital Intermediate U.S. Government/Credit Bond Index is an unmanaged, market value weighted index of investment grade, fixed-rate debt issues, including government and corporate securities, with maturities between one and ten years.
Portfolio Characteristics
Quality Distribution* | Sector Weightings* |
Net Assets: | $464,014,957 | Annualized Expense Ratio: | ||||
SEC 30-Day Yield:** | Institutional Class: | 0.30 | % | |||
Institutional Class: | 5.20% | Investor Class: | 0.55 | %*** | ||
Investor Class: | 4.94% | Portfolio Turnover Rate: | 16.7 | %# | ||
Average Effective Duration: | 3.87 years | Total Number of Holdings: | 305 | |||
Average Effective Maturity: | 5.07 years |
* | Percentages shown are based on the Fund’s total net assets. |
** | SEC yields are based on SEC guidelines and are calculated for the 30 days ended June 30, 2009. |
*** | Includes 0.25% 12b-1 fee. |
# | Not annualized. |
Page 16
Baird Intermediate Bond Fund
Average Annual Total Returns
Since | |||
For the Periods Ended June 30, 2009 | One Year | Five Years | Inception(1) |
Institutional Class Shares | 3.97% | 4.15% | 5.50% |
Investor Class Shares | 3.59% | 3.85% | 5.22% |
Barclays Capital Intermediate U.S. Government/Credit Bond Index(2) | 5.27% | 4.57% | 5.65% |
(1) | For the period from September 29, 2000 (commencement of operations) through June 30, 2009. |
(2) | The Barclays Capital Intermediate U.S. Government/Credit Bond Index is an unmanaged, market value weighted index of investment grade, fixed-rate debt including government and corporate securities with maturities between one and 10 years. This index does not reflect any deduction for fees, expenses or taxes. A direct investment in an index is not possible. |
The returns shown in the table above reflect reinvestment of dividends and/or capital gains distributions in additional shares. The returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Past performance does not guarantee future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.
For information about the performance of the Fund as of the most recent month-end, please call 1-866-44BAIRD or visit www.bairdfunds.com. Mutual fund performance changes over time and current performance may be lower or higher than that stated.
Page 17
Baird Intermediate Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 97.1% | |||||||
Asset Backed Securities – 2.4% | |||||||
$ | 925,000 | American Express Credit | |||||
Account Master Trust, | |||||||
Series 2005-5, Class A, | |||||||
4.276%, 02/15/2013 | $ | 917,005 | |||||
158,057 | Amresco Residential | ||||||
Securities Mortgage | |||||||
Loan Trust, | |||||||
Series 1998-1, Class A6, | |||||||
6.51%, 08/25/2027 | 135,954 | ||||||
750,000 | Chase Issuance Trust, | ||||||
Series 2005-A10, Class | |||||||
A10, 4.65%, 12/17/2012 | 774,475 | ||||||
671,304 | CitiFinancial Mortgage | ||||||
Securities, Inc., | |||||||
Series 2004-1, Class AF2, | |||||||
2.645%, 04/25/2034 | 633,214 | ||||||
8,102 | Cityscape Home | ||||||
Equity Loan Trust, | |||||||
1997-C, Class A4, | |||||||
7.00%, 07/25/2028 | 7,959 | ||||||
Countrywide Asset-Backed | |||||||
Certificates: | |||||||
2,134,729 | Series 2006-S3, Class A2, | ||||||
6.085%, 06/25/2021 | 616,468 | ||||||
146,518 | Series 2006-S2, Class A2, | ||||||
5.627%, 07/25/2027 | 103,253 | ||||||
120,640 | Series 2004-12, Class AF6, | ||||||
4.634%, 03/25/2035 | 73,776 | ||||||
441,431 | Series 2005-12, Class 1A2, | ||||||
4.847%, 02/25/2036 | 438,507 | ||||||
4,000,000 | Series 2006-13, Class 1AF2, | ||||||
5.884%, 01/25/2037 | 3,169,139 | ||||||
375,000 | Series 2006-13, Class 1AF3, | ||||||
5.944%, 01/25/2037 | 162,409 | ||||||
1,380,000 | Series 2006-9, Class 1AF3, | ||||||
5.859%, 10/25/2046 | 425,633 | ||||||
Delta Funding Home | |||||||
Equity Loan Trust: | |||||||
69,820 | Series 1997-2, Class A6, | ||||||
7.04%, 06/25/2027 | 69,642 | ||||||
38,785 | Series 1999-1, Class A6F, | ||||||
6.34%, 12/15/2028 | 37,339 | ||||||
538,268 | Series 1999-2, Class A7F, | ||||||
7.03%, 08/15/2030 | 399,043 | ||||||
175,000 | Discover Card | ||||||
Master Trust I, | |||||||
Series 2005-2, Class A, | |||||||
4.266%, 04/17/2012 | 174,705 | ||||||
29,302 | Equivantage Home | ||||||
Equity Loan Trust, | |||||||
Series 1996-3, Class A3, | |||||||
7.70%, 09/25/2027 | 23,506 | ||||||
GMAC Mortgage | |||||||
Corporation Loan Trust: | |||||||
151,177 | Series 2004-GH1, Class A2, | ||||||
4.39%, 12/25/2025 | 143,757 | ||||||
215,721 | Series 2005-HE3, Class A2, | ||||||
3.526%, 02/25/2036 | 70,110 | ||||||
Green Tree Financial | |||||||
Corporation: | |||||||
143,164 | Series 1993-4, Class A5, | ||||||
7.05%, 01/15/2019 | 133,118 | ||||||
864,947 | Series 1998-2, Class A5, | ||||||
6.24%, 12/01/2028 | 753,851 | ||||||
1,132,394 | Series 1998-3, Class A5, | ||||||
6.22%, 03/01/2030 | 908,472 | ||||||
426,388 | Series 1998-4, Class A5, | ||||||
6.18%, 04/01/2030 | 343,579 | ||||||
57,353 | IMC Home Equity | ||||||
Loan Trust, | |||||||
Series 1998-1, Class A6, | |||||||
7.02%, 06/20/2029 | 47,667 |
The accompanying notes are an integral part of these financial statements.
Page 18
Baird Intermediate Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 97.1% (cont.) | |||||||
Asset Backed Securities – 2.4% (cont.) | |||||||
$ | 100,000 | MBNA Master | |||||
Credit Card Trust, | |||||||
Series 2005-4A, Class A4, | |||||||
3.38%, 11/15/2012 | $ | 99,086 | |||||
185,123 | Oakwood Mortgage | ||||||
Investors, Inc., | |||||||
Series 1999-B, Class A3, | |||||||
6.45%, 11/15/2017 | 112,927 | ||||||
19,842 | Residential Asset | ||||||
Mortgage Products, Inc., | |||||||
Series 2003-RS7, Class AI6, | |||||||
5.34%, 08/25/2033 | 15,536 | ||||||
130,302 | Structured Asset Securities | ||||||
Corporation, Series | |||||||
2005-2XS, Class 1A2A, | |||||||
4.51%, 02/25/2035 | 122,756 | ||||||
10,912,886 | |||||||
Financial – 18.6% | |||||||
American General Finance | |||||||
Corporation Notes: | |||||||
25,000 | 4.625%, 09/01/2010 | 18,923 | |||||
550,000 | 4.00%, 03/15/2011 | 364,455 | |||||
630,000 | AmSouth Bancorporation | ||||||
Subordinated Debentures, | |||||||
6.75%, 11/01/2025 | 428,046 | ||||||
600,000 | Banco Santander Chile, | ||||||
7.375%, 07/18/2012 f | 642,751 | ||||||
1,900,000 | Bancwest Corporation | ||||||
Subordinated Notes, | |||||||
8.30%, 01/15/2011 | 1,960,566 | ||||||
835,000 | Bank of America | ||||||
Corporation Subordinated | |||||||
Notes, 10.20%, | |||||||
07/15/2015 | 873,278 | ||||||
1,500,000 | Bank of Tokyo – | ||||||
Mitsubishi/UFJ NY, | |||||||
7.40%, 06/15/2011 f | 1,543,413 | ||||||
1,043,000 | Bank One Corporation | ||||||
Subordinated Notes, | |||||||
10.00%, 08/15/2010 | 1,109,197 | ||||||
125,000 | Bank United | ||||||
Subordinated Notes, | |||||||
8.00%, 03/15/2009 @ | 62 | ||||||
2,695,000 | BankAmerica Institutional, | ||||||
8.07%, 12/31/2026 | |||||||
(Acquired 01/04/2006 – | |||||||
11/06/2007; Aggregate | |||||||
Cost $2,776,627) * | 2,236,465 | ||||||
2,500,000 | Banponce Trust I, | ||||||
8.327%, 02/01/2027 | |||||||
(Callable 08/31/2009) | 1,469,918 | ||||||
1,000,000 | Barclays Bank PLC | ||||||
Subordinated Notes, | |||||||
7.40%, 12/15/2009 f | 1,018,173 | ||||||
1,000,000 | Bear Stearns Cos., Inc., | ||||||
6.40%, 10/02/2017 | 1,001,775 | ||||||
1,000,000 | BOI Capital Funding II, | ||||||
5.571%, 02/01/2049 | |||||||
(Callable 02/01/2016) | |||||||
(Acquired 01/20/2006; | |||||||
Cost $1,000,000) * f | 375,000 | ||||||
520,000 | CIT Group Company | ||||||
of Canada, | |||||||
5.20%, 06/01/2015 f | 301,230 | ||||||
CIT Group, Inc.: | |||||||
75,000 | 4.75%, 12/15/2010 | 58,876 | |||||
200,000 | 5.40%, 01/30/2016 | 112,934 | |||||
1,500,000 | 6.10%, 03/15/2067 | ||||||
(Callable 03/15/2017) | 568,935 | ||||||
1,000,000 | Citigroup, Inc., | ||||||
5.50%, 04/11/2013 | 937,245 |
The accompanying notes are an integral part of these financial statements.
Page 19
Baird Intermediate Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 97.1% (cont.) | |||||||
Financial – 18.6% (cont.) | |||||||
$ | 1,000,000 | Compass Bank | |||||
Subordinated Notes, | |||||||
8.10%, 08/15/2009 | $ | 999,208 | |||||
1,760,000 | Corestates Capital Trust I, | ||||||
8.00%, 12/15/2026 | |||||||
(Acquired 11/29/2005 | |||||||
and 10/10/2007; Cost | |||||||
$267,543 and | |||||||
$1,543,518, respectively) * | 1,152,677 | ||||||
375,000 | Corp Andina | ||||||
De Fomento Notes, | |||||||
7.375%, 01/18/2011 f | 392,432 | ||||||
1,900,000 | Countrywide Financial | ||||||
Corporation Subordinated | |||||||
Notes, 6.25%, 05/15/2016 | 1,685,633 | ||||||
50,000 | Dresdner Bank-New York | ||||||
Subordinated Debentures, | |||||||
7.25%, 09/15/2015 f | 42,918 | ||||||
1,000,000 | Export-Import | ||||||
Bank Korea Notes, | |||||||
5.125%, 02/14/2011 f | 1,013,072 | ||||||
416,065 | First National Bank of | ||||||
Chicago Pass-Thru | |||||||
Certificates, Series 1993-A, | |||||||
8.08%, 01/05/2018 | 458,945 | ||||||
2,600,000 | First National Bank of | ||||||
Omaha Subordinated Notes, | |||||||
7.32%, 12/01/2010 | 2,552,729 | ||||||
2,125,000 | First Union Capital I, | ||||||
Series A, 7.935%, | |||||||
01/15/2027 (Callable | |||||||
08/31/2009) | 1,924,967 | ||||||
775,000 | FMR LLC Notes, | ||||||
4.75%, 03/01/2013 | |||||||
(Acquired 02/26/2003; | |||||||
Cost $776,022) * | 728,585 | ||||||
2,300,000 | GE Global Insurance | ||||||
Holding Corp., | |||||||
7.50%, 06/15/2010 | 2,294,910 | ||||||
General Electric Capital | |||||||
Corporation Notes: | |||||||
800,000 | 6.00%, 06/15/2012 | 840,952 | |||||
2,000,000 | 5.625%, 09/15/2017 | 1,914,096 | |||||
1,150,000 | Genworth Financial Inc. | ||||||
Notes, 5.75%, 06/15/2014 | 807,332 | ||||||
1,975,000 | Glencore Funding LLC, | ||||||
6.00%, 04/15/2014 | |||||||
(Acquired 03/31/2004 – | |||||||
12/04/2006; Aggregate | |||||||
Cost $1,950,076) * | 1,631,172 | ||||||
GMAC LLC: | |||||||
1,025,000 | 7.75%, 01/19/2010 | 999,530 | |||||
80,000 | 7.50%, 12/31/2013 | ||||||
(Acquired 02/26/2007 | |||||||
and 09/26/2007; Cost | |||||||
$270,598 and | |||||||
$24,788, respectively) * | 62,000 | ||||||
200,000 | 6.75%, 12/01/2014 | 153,755 | |||||
96,000 | 8.00%, 12/31/2018 | ||||||
(Acquired 02/26/2007 | |||||||
and 09/26/2007; Cost | |||||||
$348,757 and | |||||||
$31,678, respectively) * | 60,960 | ||||||
Goldman Sachs | |||||||
Group, Inc. Notes: | |||||||
1,125,000 | 5.15%, 01/15/2014 | 1,129,116 | |||||
1,000,000 | 6.00%, 05/01/2014 | 1,043,660 | |||||
1,800,000 | Great West Life & Annuity | ||||||
Insurance, 7.153%, | |||||||
05/16/2046 (Acquired | |||||||
05/16/2006 and 11/08/2007; | |||||||
Cost $1,000,000 and | |||||||
$792,736, respectively) * | 1,386,000 |
The accompanying notes are an integral part of these financial statements.
Page 20
Baird Intermediate Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 97.1% (cont.) | |||||||
Financial – 18.6% (cont.) | |||||||
HSBC Finance | |||||||
Corporation Notes: | |||||||
$ | 2,000,000 | 8.00%, 07/15/2010 | $ | 2,076,360 | |||
100,000 | 5.00%, 06/30/2015 | 93,179 | |||||
2,000,000 | Huntington National | ||||||
Bank Notes, | |||||||
8.00%, 04/01/2010 | 2,000,410 | ||||||
Invesco Ltd.: f | |||||||
500,000 | 5.625%, 04/17/2012 | 460,468 | |||||
500,000 | 5.375%, 02/27/2013 | 437,183 | |||||
Istar Financial, Inc.: | |||||||
1,050,000 | 5.95%, 10/15/2013 | 462,000 | |||||
75,000 | 5.85%, 03/15/2017 | 30,000 | |||||
500,000 | J.P. Morgan Chase & | ||||||
Company Subordinated | |||||||
Notes, 6.625%, | |||||||
03/15/2012 | 526,379 | ||||||
2,000,000 | Key Bank NA, | ||||||
7.413%, 05/06/2015 | 1,792,838 | ||||||
3,000,000 | KFW, | ||||||
4.875%, 06/17/2019 f | 3,108,588 | ||||||
2,600,000 | Kookmin Bank, | ||||||
7.25%, 05/14/2014 | |||||||
(Acquired 06/12/2009; | |||||||
Cost $2,643,514) * f | 2,684,362 | ||||||
350,000 | Korea Development Bank | ||||||
Senior Unsecured Notes, | |||||||
4.625%, 09/16/2010 f | 352,829 | ||||||
Lehman Brothers | |||||||
Holdings, Inc. Notes: | |||||||
1,735,000 | 8.80%, 03/01/2015 @ | 255,913 | |||||
846,000 | 8.50%, 08/01/2015 @ | 124,785 | |||||
546,000 | Liberty Mutual Group, | ||||||
7.25%, 09/01/2012 | |||||||
(Acquired 08/03/2004; | |||||||
Cost $579,177) * | 481,170 | ||||||
775,000 | Marsh & McLennan | ||||||
Companies, Inc., | |||||||
5.375%, 07/15/2014 | 754,469 | ||||||
500,000 | MBIA Insurance Corp., | ||||||
14.00%, 01/15/2033 | |||||||
(Callable 01/15/2013) | |||||||
(Acquired 01/11/2008; | |||||||
Cost $500,000) * | 190,000 | ||||||
Merrill Lynch & Co, Inc.: | |||||||
1,000,000 | 5.70%, 05/02/2017 | 857,746 | |||||
1,000,000 | 6.875%, 04/25/2018 | 925,556 | |||||
375,000 | Met Life Global | ||||||
Funding Senior Notes, | |||||||
4.50%, 05/05/2010 | |||||||
(Acquired 08/04/2005 | |||||||
and 03/22/2007; | |||||||
Cost $123,925 and | |||||||
$248,846, respectively) * | 379,145 | ||||||
1,000,000 | Monumental Global | ||||||
Funding II Senior | |||||||
Unsecured Notes, | |||||||
5.65%, 07/14/2011 | 1,000,088 | ||||||
1,075,000 | The Mony Group, Inc., | ||||||
8.35%, 03/15/2010 | 1,110,472 | ||||||
Morgan Stanley Senior | |||||||
Unsecured Notes: | |||||||
1,000,000 | 5.625%, 01/09/2012 | 1,023,407 | |||||
1,400,000 | 6.625%, 04/01/2018 | 1,395,668 | |||||
100,000 | Morgan Stanley | ||||||
Subordinated Notes, | |||||||
4.75%, 04/01/2014 | 94,459 | ||||||
1,530,000 | National Australia Bank Ltd. | ||||||
Subordinated Notes, Series | |||||||
A, 8.60%, 05/19/2010 f | 1,615,298 | ||||||
350,000 | National Bank of Hungary | ||||||
Yankee Debentures, | |||||||
8.875%, 11/01/2013 f | 358,785 |
The accompanying notes are an integral part of these financial statements.
Page 21
Baird Intermediate Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 97.1% (cont.) | |||||||
Financial – 18.6% (cont.) | |||||||
$ | 2,725,000 | National City | |||||
Bank of Cleveland, | |||||||
4.50%, 03/15/2010 | $ | 2,764,913 | |||||
534,000 | National City | ||||||
Bank of Kentucky | |||||||
Subordinated Notes, | |||||||
6.30%, 02/15/2011 | 540,415 | ||||||
2,300,000 | Navigators Group Inc. | ||||||
Senior Unsecured Notes, | |||||||
7.00%, 05/01/2016 | 1,788,273 | ||||||
1,260,000 | NB Capital Trust IV, | ||||||
8.25%, 04/15/2027 | 1,058,012 | ||||||
1,000,000 | North Fork | ||||||
Capital Trust II, | |||||||
8.00%, 12/15/2027 | 725,927 | ||||||
1,319,000 | PNC Funding Corporation, | ||||||
7.50%, 11/01/2009 | 1,337,126 | ||||||
Protective Life | |||||||
Corporation Senior Notes: | |||||||
475,000 | 5.45%, 09/28/2012 | 474,238 | |||||
75,000 | 4.30%, 06/01/2013 | 69,436 | |||||
2,000,000 | Rabobank Nederland | ||||||
Global Senior Unsecured | |||||||
Notes, 4.20%, 05/13/2014 | |||||||
(Acquired 05/06/2009; | |||||||
Cost $1,996,340) * f | 1,994,870 | ||||||
1,650,000 | Regions Bank, | ||||||
7.50%, 05/15/2018 | 1,454,115 | ||||||
800,000 | Santander Financial | ||||||
Issuances, | |||||||
6.375%, 02/15/2011 f | 798,326 | ||||||
1,300,000 | Schwab Capital Trust I, | ||||||
7.50%, 11/15/2037 | |||||||
(Callable 11/15/2017) | 1,083,693 | ||||||
SLM Corporation Notes: | |||||||
1,516,000 | 4.50%, 07/26/2010 | 1,432,620 | |||||
250,000 | 5.375%, 05/15/2014 | 200,928 | |||||
1,000,000 | Sovereign Bank, | ||||||
8.75%, 05/30/2018 | 983,504 | ||||||
1,000,000 | St. Paul Travelers, Inc., | ||||||
6.25%, 06/20/2016 | 1,062,517 | ||||||
1,046,000 | Toll Road Inv. | ||||||
Partnership II, | |||||||
0.00%, 02/15/2011 | |||||||
(Acquired 09/28/2004; | |||||||
Cost $969,699) * ^ | 939,766 | ||||||
1,320,000 | Transamerica Finance | ||||||
Corporation Debentures, | |||||||
0.00%, 03/01/2010 ^ | 1,230,738 | ||||||
850,000 | UFJ Finance Aruba AEC, | ||||||
6.75%, 07/15/2013 f | 880,127 | ||||||
500,000 | Washington Mutual Bank | ||||||
Subordinated Notes, | |||||||
6.875%, 06/15/2011 @ | 250 | ||||||
1,000,000 | Washington Mutual | ||||||
Financial Corporation, | |||||||
6.875%, 05/15/2011 | 1,021,050 | ||||||
1,495,000 | Westdeutsche Landesbank | ||||||
Subordinated Notes, | |||||||
4.796%, 07/15/2015 | 1,558,798 | ||||||
86,287,090 | |||||||
Industrial – 15.9% | |||||||
450,000 | Alcan, Inc., Notes, | ||||||
5.00%, 06/01/2015 f | 403,553 | ||||||
Ameritech Capital | |||||||
Funding Debentures: | |||||||
1,045,179 | 9.10%, 06/01/2016 | 1,059,685 | |||||
1,008,000 | 6.45%, 01/15/2018 | 1,073,613 | |||||
1,000,000 | Anadarko Petroleum | ||||||
Corporation Senior | |||||||
Unsecured Notes, | |||||||
6.95%, 06/15/2019 | 1,009,199 |
The accompanying notes are an integral part of these financial statements.
Page 22
Baird Intermediate Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 97.1% (cont.) | |||||||
Industrial – 15.9% (cont.) | |||||||
$ | 2,250,000 | British Sky | |||||
Broadcasting PLC, | |||||||
8.20%, 07/15/2009 f | $ | 2,251,328 | |||||
2,000,000 | British | ||||||
Telecommunications PLC, | |||||||
5.95%, 01/15/2018 f | 1,802,484 | ||||||
Bunge Ltd. Finance | |||||||
Corporation Notes: | |||||||
800,000 | 5.35%, 04/15/2014 | 778,394 | |||||
1,085,000 | 5.10%, 07/15/2015 | 994,911 | |||||
2,025,000 | CBS Corporation Senior | ||||||
Notes, 7.70%, 07/30/2010 | 2,085,021 | ||||||
1,250,000 | Clear Channel | ||||||
Communications Senior | |||||||
Unsubordinated Notes, | |||||||
5.50%, 12/15/2016 | 271,875 | ||||||
125,000 | Comcast Cable | ||||||
Communication Holdings, | |||||||
8.375%, 03/15/2013 | 142,500 | ||||||
525,000 | Comcast Corporation, | ||||||
6.50%, 01/15/2017 | 556,953 | ||||||
75,000 | Comcast Holdings | ||||||
Corporation, | |||||||
10.625%, 07/15/2012 | 87,750 | ||||||
1,281,000 | COX Communications | ||||||
Inc., 7.125%, 10/01/2012 | 1,377,019 | ||||||
750,000 | COX Communications | ||||||
Inc. Senior Unsecured | |||||||
Notes, 7.875%, 08/15/2009 | 754,493 | ||||||
CSX Corporation: | |||||||
1,775,000 | 5.75%, 03/15/2013 | 1,819,996 | |||||
450,000 | 6.25%, 04/01/2015 | 465,232 | |||||
1,000,000 | D.R. Horton Inc. | ||||||
Unsubordinated Notes, | |||||||
6.50%, 04/15/2016 | 855,000 | ||||||
Deutsche Telekom | |||||||
International | |||||||
Finance BV: f | |||||||
2,000,000 | 8.50%, 06/15/2010 | 2,103,330 | |||||
1,300,000 | 6.00%, 07/08/2019 | 1,311,570 | |||||
Donnelley (R.R.) | |||||||
& Sons Co.: | |||||||
1,500,000 | 4.95%, 05/15/2010 | 1,502,051 | |||||
875,000 | 6.125%, 01/15/2017 | 769,658 | |||||
2,300,000 | Fiserv, Inc., | ||||||
6.125%, 11/20/2012 | 2,387,393 | ||||||
300,000 | Ford Motor Company | ||||||
Debentures, | |||||||
9.215%, 09/15/2021 | 174,000 | ||||||
1,260,000 | GTE Corp Debentures, | ||||||
6.84%, 04/15/2018 | 1,311,971 | ||||||
675,000 | Halliburton Company | ||||||
Notes, 5.50%, 10/15/2010 | 705,972 | ||||||
1,375,000 | Hanson Australia Funding, | ||||||
5.25%, 03/15/2013 f | 1,081,163 | ||||||
650,000 | Hanson PLC Notes, | ||||||
6.125%, 08/15/2016 f | 485,875 | ||||||
1,195,000 | Health Care Service | ||||||
Corporation Notes, 7.75%, | |||||||
06/15/2011 (Acquired | |||||||
06/20/2001, 01/26/2005 | |||||||
and 10/19/2006; Cost | |||||||
$497,765, $346,909 and | |||||||
$379,670, respectively) * | 1,250,847 | ||||||
420,000 | Highmark, Inc. Notes, | ||||||
6.80%, 08/15/2013 | |||||||
(Acquired 08/14/2003 | |||||||
and 03/13/2008; | |||||||
Cost $399,088 and | |||||||
$20,673, respectively) * | 388,854 |
The accompanying notes are an integral part of these financial statements.
Page 23
Baird Intermediate Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 97.1% (cont.) | |||||||
Industrial – 15.9% (cont.) | |||||||
Historic Time | |||||||
Warner Inc.: | |||||||
$ | 1,847,000 | 9.125%, 01/15/2013 | $ | 2,033,551 | |||
250,000 | 6.875%, 06/15/2018 | 252,542 | |||||
2,000,000 | Humana Inc., | ||||||
7.20%, 06/15/2018 | 1,802,282 | ||||||
1,000,000 | Ingersoll-Rand | ||||||
Company Debentures, | |||||||
6.391%, 11/15/2027 f | 1,001,792 | ||||||
1,175,000 | Johnson Controls Inc. | ||||||
Senior Notes, | |||||||
5.50%, 01/15/2016 | 1,089,529 | ||||||
675,000 | Laboratory Corporation | ||||||
of America Holdings, | |||||||
5.50%, 02/01/2013 | 662,457 | ||||||
625,000 | Lafarge S.A. Notes, | ||||||
6.50%, 07/15/2016 f | 574,674 | ||||||
500,000 | Limited Brands, Inc., | ||||||
5.25%, 11/01/2014 | 425,077 | ||||||
400,000 | Marathon Global | ||||||
Funding Corporation, | |||||||
6.00%, 07/01/2012 | 422,982 | ||||||
75,000 | Martin Marietta Materials, | ||||||
Inc., 6.60%, 04/15/2018 | 71,305 | ||||||
1,625,000 | Masco Corporation, | ||||||
6.125%, 10/03/2016 | 1,364,343 | ||||||
650,000 | Nabors Industrials, Inc., | ||||||
6.15%, 02/15/2018 | 623,975 | ||||||
2,307,000 | Nextel Communications | ||||||
Senior Notes, | |||||||
6.875%, 10/31/2013 | 1,909,042 | ||||||
700,000 | PCCW-HWT Capital II | ||||||
Ltd., 6.00%, 07/15/2013 | |||||||
(Acquired 07/10/2003; | |||||||
Cost $696,731) * f | 683,953 | ||||||
925,000 | Pearson Dollar Finance | ||||||
PLC, 5.70%, 06/01/2014 | |||||||
(Acquired 09/28/2005 | |||||||
and 12/14/2007; Cost | |||||||
$611,351 and $321,181, | |||||||
respectively) * f | 914,921 | ||||||
1,975,000 | PEMEX Project | ||||||
Funding Master Trust, | |||||||
9.125%, 10/13/2010 | 2,130,630 | ||||||
2,045,000 | Plum Creek Timberlands, | ||||||
5.875%, 11/15/2015 | 1,728,673 | ||||||
800,000 | Premcor Refining Group | ||||||
Senior Unsecured Notes, | |||||||
7.50%, 06/15/2015 | |||||||
(Callable 08/31/2009) | 830,022 | ||||||
Qwest Capital Funding, Inc.: | |||||||
350,000 | 7.00%, 08/03/2009 | 350,000 | |||||
100,000 | 7.25%, 02/15/2011 | 97,000 | |||||
1,000,000 | Reed Elsevier Capital Notes, | ||||||
4.625%, 06/15/2012 | 966,623 | ||||||
1,800,000 | Rio Tinto Financial | ||||||
USA Ltd., | |||||||
6.50%, 07/15/2018 f | 1,801,049 | ||||||
75,000 | Schering-Plough | ||||||
Corporation Senior Notes, | |||||||
5.55%, 12/01/2013 | 80,562 | ||||||
500,000 | Sprint Nextel Corporation, | ||||||
6.00%, 12/01/2016 | 408,750 | ||||||
1,175,000 | Sunoco, Inc. Senior | ||||||
Unsecured Notes, | |||||||
5.75%, 01/15/2017 | 1,138,204 | ||||||
TCI Communications, | |||||||
Inc. Debentures: | |||||||
550,000 | 7.875%, 08/01/2013 | 625,772 | |||||
583,000 | 8.75%, 08/01/2015 | 664,463 |
The accompanying notes are an integral part of these financial statements.
Page 24
Baird Intermediate Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 97.1% (cont.) | |||||||
Industrial – 15.9% (cont.) | |||||||
Telecom Italia Capital: f | |||||||
$ | 1,360,000 | 4.95%, 09/30/2014 | $ | 1,301,954 | |||
725,000 | 5.25%, 10/01/2015 | 699,869 | |||||
981,000 | Tele-Communications, | ||||||
Inc. Debentures, | |||||||
9.80%, 02/01/2012 | 1,104,317 | ||||||
1,725,000 | Telefonica | ||||||
Emisiones, S.A.U., | |||||||
6.421%, 06/20/2016 f | 1,844,389 | ||||||
1,000,000 | Time Warner Cable, Inc., | ||||||
5.85%, 05/01/2017 | 998,601 | ||||||
1,470,000 | Transocean, Inc., | ||||||
6.625%, 04/15/2011 f | 1,566,429 | ||||||
500,000 | Tyco Electronics | ||||||
Group S. A., | |||||||
6.55%, 10/01/2017 f | 453,963 | ||||||
Tyco International | |||||||
Finance: f | |||||||
1,575,000 | 6.375%, 10/15/2011 | 1,659,628 | |||||
650,000 | 6.00%, 11/15/2013 | 660,932 | |||||
United AirLines, Inc. | |||||||
Pass-Thru Certificates: | |||||||
202,310 | Series 1991-A, Class A-2, | ||||||
10.02%, 03/22/2014 | 67,774 | ||||||
245,275 | Series 2000-2, Class C, | ||||||
7.762%, 10/01/2049 | 210,324 | ||||||
25,398 | Series 2001-1, Class A-2, | ||||||
6.201%, 12/31/2049 | 25,144 | ||||||
1,500,000 | Vale Overseas Limited, | ||||||
6.25%, 01/23/2017 f | 1,512,396 | ||||||
250,000 | Verizon Communications, | ||||||
Inc. Senior Unsecured | |||||||
Notes, 5.55%, 02/15/2016 | 258,766 | ||||||
650,000 | Verizon New York Inc. | ||||||
Senior Unsecured Notes, | |||||||
8.625%, 11/15/2010 | 694,477 | ||||||
1,000,000 | Vodafone Group PLC | ||||||
Senior Unsecured Notes, | |||||||
7.75%, 02/15/2010 f | 1,033,810 | ||||||
2,000,000 | Vulcan Materials Co., | ||||||
7.00%, 06/15/2018 | 1,928,072 | ||||||
25,000 | Waste Management, Inc., | ||||||
5.00%, 03/15/2014 | 24,427 | ||||||
1,450,000 | Wellpoint, Inc., | ||||||
6.80%, 08/01/2012 | 1,513,320 | ||||||
500,000 | Willamette Industries, | ||||||
Inc. Notes, | |||||||
6.60%, 06/05/2012 | 487,269 | ||||||
73,961,724 | |||||||
Mortgage Backed Securities – 16.1% | |||||||
Bank of America | |||||||
Alternative Loan Trust: | |||||||
412,975 | Series 2003-11, Class 4A1, | ||||||
4.75%, 01/25/2019 | 398,392 | ||||||
1,200,504 | Series 2004-2, Class 5A1, | ||||||
5.50%, 03/25/2019 | 1,092,555 | ||||||
1,461,486 | Series 2004-11, Class 4A1, | ||||||
5.50%, 12/25/2019 | 1,412,618 | ||||||
66,573 | Series 2005-6, Class 7A1, | ||||||
5.50%, 07/25/2020 | 60,353 | ||||||
830,700 | Series 2006-2, Class 7A1, | ||||||
6.00%, 03/25/2021 | 713,104 | ||||||
1,218,501 | Series 2006-3, Class 6A1, | ||||||
6.00%, 04/25/2036 | 892,171 | ||||||
1,184,167 | Series 2006-4, Class 3CB4, | ||||||
6.00%, 05/25/2046 | 806,604 | ||||||
879,526 | Bank of America | ||||||
Funding Corporation, | |||||||
Series 2003-3, Class 1A41, | |||||||
5.50%, 10/25/2033 | 857,510 |
The accompanying notes are an integral part of these financial statements.
Page 25
Baird Intermediate Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 97.1% (cont.) | |||||||
Mortgage Backed Securities – 16.1% (cont.) | |||||||
Citicorp Mortgage | |||||||
Securities, Inc.: | |||||||
$ | 1,266,401 | Series 2004-5, Class 1A25, | |||||
5.50%, 10/25/2014 | $ | 1,204,213 | |||||
76,359 | Series 2004-4, Class A2, | ||||||
5.25%, 06/25/2034 | 75,692 | ||||||
1,163,219 | Series 2004-4, Class A5, | ||||||
5.50%, 06/25/2034 | 1,148,127 | ||||||
Countrywide Alternative | |||||||
Loan Trust: | |||||||
309,777 | Series 2005-5R, Class A2, | ||||||
4.75%, 12/25/2018 | 284,445 | ||||||
1,169,034 | Series 2005-50CB, Class | ||||||
4A1, 5.00%, 11/25/2020 | 916,163 | ||||||
1,344,789 | Series 2005-85CB, Class | ||||||
3A1, 5.25%, 02/25/2021 | |||||||
(Acquired 09/26/2007 – | |||||||
01/28/2009; Aggregate | |||||||
Cost $1,251,900) * | 991,089 | ||||||
1,985,017 | Series 2006-7CB, Class | ||||||
3A1, 5.25%, 05/25/2021 | 1,382,689 | ||||||
125,000 | Series 2005-10CB, Class | ||||||
1A6, 5.50%, 05/25/2035 | 89,735 | ||||||
140,456 | Series 2005-11CB, Class | ||||||
2A1, 5.50%, 06/25/2035 | 110,252 | ||||||
1,294,980 | Series 2005-34CB, Class | ||||||
1A6, 5.50%, 09/25/2035 | 1,080,832 | ||||||
823,505 | Countrywide Home | ||||||
Loans, Inc., | |||||||
Series 2003-18, Class A3, | |||||||
5.25%, 07/25/2033 | 800,373 | ||||||
Credit Suisse First Boston | |||||||
Mortgage Securities Corp.: | |||||||
82,003 | Series 2005-11, Class 5A1, | ||||||
5.25%, 12/25/2020 | 73,694 | ||||||
118,894 | Series 2005-3, Class 3A27, | ||||||
5.50%, 07/25/2035 | 103,472 | ||||||
Federal Gold Loan | |||||||
Mortgage Corporation | |||||||
(FGLMC) Pass-Thru | |||||||
Certificates: | |||||||
718,229 | 5.00%, 08/01/2011 | 745,435 | |||||
1,009,722 | 6.00%, 06/01/2021 | 1,069,138 | |||||
44,409 | 6.00%, 07/01/2028 | 46,852 | |||||
Federal Home Loan | |||||||
Mortgage Corporation | |||||||
(FHLMC): | |||||||
1,125,081 | Series 3033, Class LU, | ||||||
5.50%, 03/15/2013 | 1,185,751 | ||||||
1,330,800 | Series 2695, Class UA, | ||||||
5.50%, 09/15/2014 | 1,388,195 | ||||||
5,524,215 | Series R014, Class AL, | ||||||
5.50%, 10/15/2014 | 5,639,199 | ||||||
470,093 | Series R001, Class AE, | ||||||
4.375%, 04/15/2015 | 482,532 | ||||||
1,825,612 | Series R003, Class VA, | ||||||
5.50%, 08/15/2016 | 1,952,772 | ||||||
2,311,966 | Series 3122, Class VA, | ||||||
6.00%, 01/15/2017 | 2,445,730 | ||||||
1,631,184 | Series R010, Class VA, | ||||||
5.50%, 04/15/2017 | 1,747,893 | ||||||
3,280,481 | Series R009, Class AJ, | ||||||
5.75%, 12/15/2018 | 3,395,117 | ||||||
4,650 | Series 74, Class F, | ||||||
6.00%, 10/15/2020 | 4,759 | ||||||
150,000 | Series 2673, Class NC, | ||||||
5.50%, 05/15/2021 | 156,943 | ||||||
36,832 | Series 1395, Class G, | ||||||
6.00%, 10/15/2022 | 38,432 | ||||||
2,914,599 | Series 2970, Class DA, | ||||||
5.50%, 01/15/2023 | 3,024,411 |
The accompanying notes are an integral part of these financial statements.
Page 26
Baird Intermediate Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 97.1% (cont.) | |||||||
Mortgage Backed Securities – 16.1% (cont.) | |||||||
Federal National Mortgage | |||||||
Association (FNMA): | |||||||
$ | 742,475 | Series 2006-B2, Class AB, | |||||
5.50%, 05/25/2014 | $ | 771,540 | |||||
674,542 | Series 2003-24, Class PC, | ||||||
5.00%, 11/25/2015 | 687,028 | ||||||
84,239 | Series 2005-6, Class VE, | ||||||
5.50%, 04/25/2016 | 89,631 | ||||||
1,525,544 | Series 2006-B1, Class AB, | ||||||
6.00%, 06/25/2016 | 1,585,132 | ||||||
46,024 | Series 2003-35, Class TD, | ||||||
5.00%, 12/25/2016 | 46,930 | ||||||
21,869 | Series 1989-2, Class D, | ||||||
8.80%, 01/25/2019 | 23,692 | ||||||
1,637 | Series G-29, Class O, | ||||||
8.50%, 09/25/2021 | 1,767 | ||||||
143,561 | Series 1991-137, Class H, | ||||||
7.00%, 10/25/2021 | 155,800 | ||||||
116,057 | Series 1992-136, Class PK, | ||||||
6.00%, 08/25/2022 | 124,552 | ||||||
65,597 | Series 1993-32, Class H, | ||||||
6.00%, 03/25/2023 | 69,413 | ||||||
5,812,573 | Series 2002-85, Class PD, | ||||||
5.50%, 05/25/2031 | 5,989,570 | ||||||
119,408 | Series 2004-90, Class YB, | ||||||
4.00%, 07/25/2032 | 121,736 | ||||||
2,271,466 | Series 2004-W6, Class 1A6, | ||||||
5.50%, 07/25/2034 | 2,372,973 | ||||||
3,339,850 | Series 2004-W10, Class | ||||||
A24, 5.00%, 08/25/2034 | 3,310,522 | ||||||
4,061,041 | GMAC Commercial | ||||||
Mortgage Securities Inc, | |||||||
Series 2001-C1, Class A2, | |||||||
6.465%, 04/15/2034 | 4,128,768 | ||||||
GMAC Mortgage | |||||||
Corporation Loan Trust: | |||||||
140,492 | Series 2003-J1, Class A2, | ||||||
5.25%, 03/25/2018 | 137,633 | ||||||
1,381,718 | Series 2004-J4, Class A2, | ||||||
5.50%, 09/25/2034 | 1,369,087 | ||||||
349,031 | Government National | ||||||
Mortgage Association | |||||||
(GNMA), | |||||||
Series 1999-4, Class ZB, | |||||||
6.00%, 02/20/2029 | 372,958 | ||||||
J.P. Morgan Alternative | |||||||
Loan Trust: | |||||||
3,078,027 | Series 2005-S1, Class 3A1, | ||||||
5.50%, 10/25/2020 | 2,082,478 | ||||||
1,268,402 | Series 2006-A1, Class 2A1, | ||||||
5.80%, 03/25/2036 | 716,467 | ||||||
2,068,789 | Series 2006-S2, Class A2, | ||||||
5.81%, 05/25/2036 | 1,778,465 | ||||||
674,837 | Lehman Mortgage Trust, | ||||||
Series 2006-4, Class 3A1, | |||||||
5.00%, 08/25/2021 | 563,278 | ||||||
Master Alternative | |||||||
Loans Trust: | |||||||
1,946,057 | Series 2004-1, Class 1A1, | ||||||
5.00%, 01/25/2019 | 1,721,653 | ||||||
426,144 | Series 2004-3, Class 1A1, | ||||||
5.00%, 03/25/2019 | 398,311 | ||||||
337,139 | Series 2005-3, Class 4A1, | ||||||
5.50%, 03/25/2020 | 272,003 | ||||||
69,807 | Merrill Lynch Mortgage | ||||||
Investors Inc., | |||||||
Series 2005-A8, Class | |||||||
A1C1, 5.25%, 08/25/2036 | 61,118 |
The accompanying notes are an integral part of these financial statements.
Page 27
Baird Intermediate Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 97.1% (cont.) | |||||||
Mortgage Backed Securities – 16.1% (cont.) | |||||||
Residential Accredit | |||||||
Loans, Inc.: | |||||||
$ | 51,342 | Series 2004-QS6, Class | |||||
A1, 5.00%, 05/25/2019 | $ | 46,962 | |||||
50,428 | Series 2004-QS13, Class | ||||||
CB, 5.00%, 09/25/2019 | 44,613 | ||||||
300,377 | Salomon Brothers | ||||||
Mortgage Securities VII, | |||||||
Series 2003-UP2, Class A2, | |||||||
4.00%, 06/25/2033 | 295,170 | ||||||
Washington Mutual, Inc. | |||||||
Pass-Thru Certificates: | |||||||
2,110,283 | Series 2004-CB1, Class 5A, | ||||||
5.00%, 06/25/2019 | 2,077,969 | ||||||
2,942,568 | Series 2004-CB3, Class 3A, | ||||||
5.50%, 10/25/2019 | 2,932,453 | ||||||
1,085,937 | Series 2004-CB3, Class 4A, | ||||||
6.00%, 10/25/2019 | 986,506 | ||||||
678,663 | Series 2004-CB4, Class | ||||||
21A, 5.50%, 12/25/2019 | 604,807 | ||||||
883,823 | Series 2004-CB4, Class | ||||||
22A, 6.00%, 12/25/2019 | 797,692 | ||||||
74,555,919 | |||||||
Taxable Municipal Bonds – 0.2% | |||||||
1,430,000 | Tobacco Settlement | ||||||
Authority Iowa, | |||||||
6.50%, 06/01/2023 | 1,069,712 | ||||||
187,586 | Tobacco Settlement | ||||||
Financing Corporation, | |||||||
Series 2001-A, Class A, | |||||||
6.36%, 05/15/2025 | 172,742 | ||||||
1,242,454 | |||||||
Utilities – 6.3% | |||||||
2,415,000 | Baltimore Gas & | ||||||
Electic Co. Senior | |||||||
Unsecured Notes, | |||||||
6.125%, 07/01/2013 | 2,520,217 | ||||||
1,715,000 | Cilcorp Inc. Senior Notes, | ||||||
8.70%, 10/15/2009 | 1,680,700 | ||||||
50,000 | Commonwealth Edison, | ||||||
5.95%, 08/15/2016 | 51,988 | ||||||
Dominion Resources Inc.: | |||||||
450,000 | 6.25%, 06/30/2012 | 483,154 | |||||
1,000,000 | 5.15%, 07/15/2015 | 1,014,402 | |||||
600,000 | Energy Transfer Partners, | ||||||
5.65%, 08/01/2012 | 611,860 | ||||||
600,000 | Exelon Corporation | ||||||
Senior Notes, | |||||||
6.75%, 05/01/2011 | 626,260 | ||||||
2,500,000 | Kinder Morgan Finance, | ||||||
5.70%, 01/05/2016 f | 2,143,750 | ||||||
287,305 | Kiowa Power Partners LLC, | ||||||
4.811%, 12/30/2013 | |||||||
(Acquired 11/19/2004; | |||||||
Cost $287,305) * | 263,644 | ||||||
300,000 | Korea Electric Power | ||||||
Corporation, | |||||||
6.75%, 08/01/2027 f | 228,042 | ||||||
1,000,000 | Korea Hydro & Nuclear | ||||||
Power Company Senior | |||||||
Unsecured Notes, | |||||||
6.25%, 06/17/2014 | |||||||
(Acquired 06/10/2009; | |||||||
Cost $989,350) * f | 997,522 | ||||||
1,475,000 | National Grid PLC | ||||||
Senior Unsecured Notes, | |||||||
6.30%, 08/01/2016 f | 1,515,393 |
The accompanying notes are an integral part of these financial statements.
Page 28
Baird Intermediate Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 97.1% (cont.) | |||||||
Utilities – 6.3% (cont.) | |||||||
NiSource Finance | |||||||
Corporation: | |||||||
$ | 1,000,000 | 2.915%, 11/23/2009 | |||||
(Callable 08/31/2009) | $ | 992,059 | |||||
175,000 | 7.875%, 11/15/2010 | 180,756 | |||||
1,000,000 | 10.75%, 03/15/2016 | 1,109,197 | |||||
1,875,000 | ONEOK, Inc. | ||||||
Senior Notes, | |||||||
7.125%, 04/15/2011 | 1,976,884 | ||||||
400,000 | ONEOK Partners | ||||||
LP Notes, | |||||||
5.90%, 04/01/2012 | 410,380 | ||||||
1,775,000 | PPL Energy Supply, | ||||||
LLC Bonds, Series A | |||||||
5.70%, 10/15/2015 | 1,791,488 | ||||||
388,000 | PPL Energy Supply, | ||||||
LLC Senior Notes, | |||||||
6.40%, 11/01/2011 | 408,659 | ||||||
900,000 | Progress Energy, Inc. | ||||||
Senior Notes, | |||||||
6.85%, 04/15/2012 | 974,740 | ||||||
175,000 | PSE&G Energy Holdings | ||||||
LLC Senior Notes, | |||||||
8.50%, 06/15/2011 | 176,683 | ||||||
PSE&G Power LLC: | |||||||
275,000 | 7.75%, 04/15/2011 | 294,328 | |||||
425,000 | 5.00%, 04/01/2014 | 428,388 | |||||
805,997 | RGS (I&M) Funding | ||||||
Corporation Debentures, | |||||||
9.82%, 12/07/2022 | 881,978 | ||||||
1,500,000 | Rockies Express Pipeline | ||||||
LLC, 5.776%, 08/20/2009 | |||||||
(Acquired 09/17/2007; | |||||||
Cost $1,499,619) * | 1,500,143 | ||||||
1,400,000 | Spectra Energy Capital, | ||||||
5.668%, 08/15/2014 | 1,413,665 | ||||||
1,340,000 | Transcontinental Gas | ||||||
Pipe Line Corporation | |||||||
Senior Notes, | |||||||
8.875%, 07/15/2012 | 1,473,346 | ||||||
Vectren Utility Holdings: | |||||||
1,000,000 | 6.625%, 12/01/2011 | 1,048,503 | |||||
575,000 | 5.25%, 08/01/2013 | 582,153 | |||||
1,375,000 | Williams Companies, Inc. | ||||||
Senior Unsecured Notes: | |||||||
8.125%, 03/15/2012 | 1,424,981 | ||||||
251,896 | Yosemite Securities Trust I, | ||||||
8.25%, 11/15/2104 | |||||||
(Acquired 04/26/2001; | |||||||
Cost $251,896) * f @ | 157 | ||||||
29,205,420 | |||||||
U.S. Government Agency Issues – 17.0% | |||||||
225,000 | Federal Home Loan | ||||||
Mortgage Corporation | |||||||
(FHLMC), | |||||||
4.50%, 07/15/2013 | 242,193 | ||||||
Federal National Mortgage | |||||||
Association (FNMA): | |||||||
44,175,000 | 3.625%, 02/12/2013 | 46,446,788 | |||||
32,125,000 | 2.75%, 03/13/2014 | 32,056,253 | |||||
78,745,234 | |||||||
U.S. Treasury Obligations – 20.6% | |||||||
U.S. Treasury Bonds: | |||||||
11,425,000 | 2.25%, 05/31/2014 | 11,271,448 | |||||
48,350,000 | 9.125%, 05/15/2018 | 69,257,604 | |||||
10,650,000 | 8.50%, 02/15/2020 | 14,976,562 | |||||
95,505,614 | |||||||
Total Long-Term | |||||||
Investments | |||||||
(Cost $469,150,003) | 450,416,341 |
The accompanying notes are an integral part of these financial statements.
Page 29
Baird Intermediate Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Shares | Value | ||||||
SHORT-TERM INVESTMENTS – 2.3% | |||||||
Money Markets – 2.3% | |||||||
10,707,395 | Short-Term Investment | ||||||
Company Liquid Assets | |||||||
Portfolio – AIM Fund | $ | 10,707,395 | |||||
Total Short-Term | |||||||
Investments | |||||||
(Cost $10,707,395) | 10,707,395 | ||||||
Principal | |||||||
Amount | |||||||
INVESTMENTS PURCHASED | |||||||
WITH CASH PROCEEDS FROM | |||||||
SECURITIES LENDING – 39.9% | |||||||
Commercial Paper – 0.7% | |||||||
$ | 3,289,728 | Atlantic East | |||||
Funding LLC, | |||||||
3.059%, 03/25/10 # ** | 3,289,728 | ||||||
3,289,728 | |||||||
Corporate Bond – 0.7% | |||||||
3,018,477 | Svenska Handelsbanken, | ||||||
4.418%, 08/06/09 f | 3,018,477 | ||||||
3,018,477 | |||||||
Shares | |||||||
Investment Companies – 38.5% | |||||||
177,739,341 | Mount Vernon Securities | ||||||
Lending Trust | |||||||
Prime Portfolio | 177,739,341 | ||||||
1,067,653 | Reserve Primary Fund # ** | 1,067,653 | |||||
178,806,994 | |||||||
Total Investments | |||||||
Purchased With Cash | |||||||
Proceeds From | |||||||
Securities Lending | |||||||
(Cost $185,115,199) | 185,115,199 | ||||||
Total Investments | |||||||
(Cost $664,972,597) – | |||||||
139.3% | 646,238,935 | ||||||
Liabilities in Excess of | |||||||
Other Assets – (39.3)% | (182,224,008 | ) | |||||
TOTAL NET | |||||||
ASSETS – 100.0% | $ | 464,014,927 |
* | Restricted Security Deemed Liquid |
** | Illiquid Security |
f | Foreign Security |
^ | Non-Income Producing |
# | Priced at Fair Value by the Valuation Committee as delegated by the Baird Funds’ Board of Directors |
@ | Security in Default |
The accompanying notes are an integral part of these financial statements.
Page 30
Baird Intermediate Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
SFAS 157 – Summary of Fair Value Exposure at June 30, 2009
As adopted by the Fund, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“SFAS 157”) defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. Under SFAS 157, various inputs are used in determining the value of the Fund’s investments. These inputs are summarized into three broad levels and described below:
Level 1 – | Quoted prices in active markets for identical securities. |
Level 2 – | Other significant observable inputs (including quoted prices for similar securities, quoted prices for identical securities in inactive markets, dealer indications, interest rates, yield curves, benchmark yields, issuer spreads, prepayment speeds, cash flows, credit risk, default rates, information about issuers, sectors and markets, inputs corroborated by observable market data, etc.) |
Level 3 – | Significant unobservable inputs (including the Fund’s own assumptions about the assumptions that market participants would use in pricing the security). |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Fund’s investments as of June 30, 2009:
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Fixed Income | ||||||||||||||||
Asset Backed Securities | $ | — | $ | 10,912,886 | $ | — | $ | 10,912,886 | ||||||||
Corporate Debt Securities | — | 189,454,234 | — | 189,454,234 | ||||||||||||
Mortgage Backed Securities | — | 74,555,919 | — | 74,555,919 | ||||||||||||
Taxable Municipal Bonds | — | 1,242,454 | — | 1,242,454 | ||||||||||||
U.S. Government Agency Issues | — | 78,745,234 | — | 78,745,234 | ||||||||||||
U.S. Treasury Obligations | — | 95,505,614 | — | 95,505,614 | ||||||||||||
Total Fixed Income | — | 450,416,341 | — | 450,416,341 | ||||||||||||
Short-Term Investments | ||||||||||||||||
Money Market Mutual Funds | 10,707,395 | — | — | 10,707,395 | ||||||||||||
Total Short-Term Investments | 10,707,395 | — | — | 10,707,395 | ||||||||||||
Investments Purchased With Cash | ||||||||||||||||
Proceeds From Securities Lending | ||||||||||||||||
Commercial Paper | — | 3,289,728 | — | 3,289,728 | ||||||||||||
Corporate Bonds | — | 3,018,477 | — | 3,018,477 | ||||||||||||
Money Market Mutual Funds | 177,739,341 | — | 1,067,653 | 178,806,994 | ||||||||||||
Total Investments Purchased With Cash | ||||||||||||||||
Proceeds From Securities Lending | 177,739,341 | 6,308,205 | 1,067,653 | 185,115,199 | ||||||||||||
Total Investments in Securities | $ | 188,446,736 | $ | 456,724,546 | $ | 1,067,653 | $ | 646,238,935 |
Page 31
Baird Intermediate Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Level 3 Reconciliation Disclosure
Following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value.
Description | Investments in Securities | |||
Balance as of December 31, 2008 | $ | 2,371,982 | ||
Accrued discounts/premiums | — | |||
Realized gain (loss) | — | |||
Change in unrealized appreciation (depreciation) | — | |||
Net purchases (sales/paydowns) | (1,195,628 | ) | ||
Transfers in and/or out of Level 3 * | (108,701 | ) | ||
Balance as of June 30, 2009 | $ | 1,067,653 | ||
Change in unrealized appreciation (depreciation) during | ||||
the year for level 3 investments held at June 30, 2009. | — |
* | The information used in the above reconciliation represents fiscal year to date activity for any investments identified as using Level 3 inputs at either the beginning or end of the current fiscal period. Transfers in or out of Level 3 represents either the beginning value (for transfers in) or ending value (for transfers out) of any security or instrument where a change in the pricing level occurred from the beginning to the end of the period. |
Page 32
Baird Intermediate Municipal Bond Fund
The Baird Intermediate Municipal Bond Fund seeks current income that is substantially exempt from federal income tax. A secondary objective is to provide total return with relatively low volatility of principal. The Fund strives to achieve an annual rate of return, before Fund expenses, greater than the annual rate of the total return of the Barclays Capital 7-Year General Obligation Bond Index. The Barclays Capital 7-Year General Obligation Bond Index is an unmanaged, market value weighted index consisting of investment grade state and local general obligation bonds that have been issued as part of an offering of at least $50 million; have a minimum amount outstanding of at least $5 million; have been issued within the last five years; and have a maturity of six to eight years.
Portfolio Characteristics
Quality Distribution* | Sector Weightings* |
Net Assets: | $500,899,071 | Annualized Expense Ratio: | ||||
SEC 30-Day Yield:** | Institutional Class: | 0.30 | % | |||
Institutional Class: | 2.56% | Investor Class: | 0.55 | %*** | ||
Investor Class: | 2.32% | Portfolio Turnover Rate: | 0.5 | %# | ||
Average Effective Duration: | 4.76 years | Total Number of Holdings: | 182 | |||
Average Effective Maturity: | 5.60 years |
* | Percentages shown are based on the Fund’s total net assets. |
** | SEC yields are based on SEC guidelines and are calculated for the 30 days ended June 30, 2009. |
*** | Includes 0.25% 12b-1 fee. |
# | Not annualized. |
Page 33
Baird Intermediate Municipal Bond Fund
Average Annual Total Returns
Since | |||
For the Periods Ended June 30, 2009 | One Year | Five Years | Inception(1) |
Institutional Class Shares | 8.15% | 4.65% | 5.10% |
Investor Class Shares | 7.87% | 4.37% | 4.82% |
Barclays Capital 7-Year General Obligation Bond Index(2) | 6.88% | 4.62% | 4.86% |
(1) | For the period from March 30, 2001 (commencement of operations) through June 30, 2009. |
(2) | The Barclays Capital 7-Year General Obligation Bond Index is an unmanaged, market value weighted index comprised of investment grade state and local general obligation bonds that have been issued as part of an offering of at least $50 million, have a minimum amount outstanding of at least $5 million, have been issued within the last five years and have a maturity of six to eight years. This index does not reflect any deduction for fees, expenses or taxes. A direct investment in an index is not possible. |
The returns shown in the table above reflect reinvestment of dividends and/or capital gains distributions in additional shares. The returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Past performance does not guarantee future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.
For information about the performance of the Fund as of the most recent month-end, please call 1-866-44BAIRD or visit www.bairdfunds.com. Mutual fund performance changes over time and current performance may be lower or higher than that stated.
Page 34
Baird Intermediate Municipal Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
MUNICIPAL BONDS – 92.3% | |||||||
Alabama – 2.5% | |||||||
$ | 11,385,000 | Montgomery Alabama | |||||
Special Care Facility | |||||||
Revenue, 5.00%, | |||||||
11/15/2021 | |||||||
(Pre-refunded | |||||||
to 11/15/2014) | $ | 12,652,834 | |||||
Alaska – 0.2% | |||||||
1,000,000 | Alaska State Housing | ||||||
Finance Corporation, | |||||||
5.00%, 06/01/2017 | |||||||
(Insured by NPFGC) | 1,044,060 | ||||||
Arizona – 2.1% | |||||||
1,415,000 | Arizona Health Facilities | ||||||
Authority Hospital | |||||||
Revenue, 6.375%, | |||||||
12/01/2037 (Pre-refunded | |||||||
to 12/01/2012) | 1,657,984 | ||||||
2,375,000 | Arizona School Facilities | ||||||
Board Revenue, 5.75%, | |||||||
07/01/2018 (Pre-refunded | |||||||
to 07/01/2014) | 2,787,015 | ||||||
1,540,000 | Phoenix Arizona | ||||||
Civic Corporation | |||||||
of Wastewater | |||||||
Systems Revenue, | |||||||
5.00%, 07/01/2015 | |||||||
(Partially Pre-refunded, | |||||||
NPFGC Insured) | 1,714,436 | ||||||
1,000,000 | Pima County | ||||||
Arizona Independent | |||||||
Development Authority, | |||||||
7.125%, 07/01/2024 | |||||||
(Pre-refunded | |||||||
to 07/01/2014) | 1,214,500 | ||||||
2,770,000 | Pima County Arizona | ||||||
Industrial Development | |||||||
Authority Revenue, 7.50%, | |||||||
07/01/2034 (Pre-refunded | |||||||
07/01/2014) | 3,289,153 | ||||||
10,663,088 | |||||||
Arkansas – 0.0% | |||||||
230,000 | Springdale Arkansas Sales | ||||||
& Use Tax Revenue, 4.00%, | |||||||
07/01/2016 (Pre-refunded | |||||||
to various dates) | 232,335 | ||||||
California – 3.4% | |||||||
2,515,000 | Coalinga California Regional | ||||||
Medical Center, 5.125%, | |||||||
03/01/2032 (Pre-refunded | |||||||
to 03/01/2015) | 2,840,592 | ||||||
Golden State Tobacco | |||||||
Securitization Corporation | |||||||
Revenue Bonds: | |||||||
1,835,000 | 6.25%, 06/01/2033 | ||||||
(Pre-refunded to | |||||||
various dates) | 2,036,446 | ||||||
1,365,000 | 6.75%, 06/01/2039 | ||||||
(Pre-refunded to | |||||||
06/01/2013) | 1,587,127 | ||||||
1,760,000 | 6.625%, 06/01/2040 | ||||||
(Pre-refunded to | |||||||
06/01/2013) | 2,038,256 | ||||||
2,360,000 | 5.50%, 06/01/2043 | ||||||
(Pre-refunded to | |||||||
06/01/2013) | 2,639,353 | ||||||
2,975,000 | Pittsburg California | ||||||
Redevelopment Agency | |||||||
Residential Mortgage | |||||||
Revenue, 9.60%, | |||||||
06/01/2016 (ETM) | 4,211,380 |
The accompanying notes are an integral part of these financial statements.
Page 35
Baird Intermediate Municipal Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | ||||||||
Amount | Value | |||||||
MUNICIPAL BONDS – 92.3% (cont.) | ||||||||
California – 3.4% (cont.) | ||||||||
$ | 1,600,000 | Port Oakland California | ||||||
Revenue, 5.00%, | ||||||||
11/01/2017 (Insured | ||||||||
by NPFGC) | $ | 1,619,440 | ||||||
165,000 | Santa Rosa California | |||||||
Hospital Revenue, 10.30%, | ||||||||
03/01/2011 (ETM) | 182,503 | |||||||
17,155,097 | ||||||||
Colorado – 9.3% | ||||||||
2,000,000 | Adams County Colorado | |||||||
Single Family Mortgage | ||||||||
Revenue, 8.875%, | ||||||||
08/01/2012 (ETM) | 2,459,160 | |||||||
1,000,000 | Aspen Grove Colorado | |||||||
Business Improvement | ||||||||
District, 7.625%, | ||||||||
12/01/2025 (Pre-refunded | ||||||||
12/01/2011) | 1,138,930 | |||||||
Colorado Springs Colorado | ||||||||
Utilities Revenue Bonds: | ||||||||
50,000 | 5.80%, 11/15/2010 (ETM) | 50,799 | ||||||
9,830,000 | 5.875%, | |||||||
11/15/2017 (ETM) | 11,142,010 | |||||||
Denver Colorado | ||||||||
Convention Center | ||||||||
& Hotel Authority | ||||||||
Revenue Bonds: | ||||||||
1,000,000 | 5.00%, 12/01/2021 | |||||||
(Pre-refunded to | ||||||||
12/01/2013) | 1,112,420 | |||||||
1,500,000 | 5.00%, 12/01/2023 | |||||||
(Pre-refunded to | ||||||||
12/01/2013) | 1,668,630 | |||||||
5,065,000 | 5.00%, 12/01/2024 | |||||||
(Pre-refunded to | ||||||||
12/01/2013) | 5,634,407 | |||||||
7,975,000 | Denver Colorado Health | |||||||
& Hospital Authority | ||||||||
Healthcare Revenue, | ||||||||
6.25%, 12/01/2033 | ||||||||
(Pre-refunded to | ||||||||
12/01/2014) | 9,544,241 | |||||||
5,460,000 | Pueblo County Colorado | |||||||
Certificate Participation, | ||||||||
6.50%, 12/01/2024 | ||||||||
(Pre-refunded to | ||||||||
12/01/2010) | 5,878,782 | |||||||
6,750,000 | Regional Transportation | |||||||
District Colorado Sales | ||||||||
Tax Revenue, 5.00%, | ||||||||
11/01/2036 (Pre-refunded | ||||||||
11/01/2016) | 7,784,303 | |||||||
46,413,682 | ||||||||
Delaware – 0.3% | ||||||||
1,230,000 | Delaware State Economic | |||||||
Development Authority | ||||||||
Revenue, 6.75%, | ||||||||
01/01/2013 (ETM) | 1,338,326 | |||||||
Florida – 10.6% | ||||||||
4,240,000 | Bartram Springs | |||||||
Community Development | ||||||||
District Special Assessment, | ||||||||
6.65%, 05/01/2034 | ||||||||
(Pre-refunded to | ||||||||
05/01/2013) | 4,839,494 | |||||||
1,925,000 | Brevard County Florida | |||||||
School Board, | ||||||||
5.00%, 07/01/2020 | ||||||||
(Insured by AMBAC) | 1,848,770 |
The accompanying notes are an integral part of these financial statements.
Page 36
Baird Intermediate Municipal Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
MUNICIPAL BONDS – 92.3% (cont.) | |||||||
Florida – 10.6% (cont.) | |||||||
$ | 5,000,000 | Coral Gables Florida | |||||
Health Facility Authority | |||||||
Hospital Revenue, 5.00%, | |||||||
08/15/2029 (Pre-refunded | |||||||
to 08/15/2014) | $ | 5,680,600 | |||||
2,230,000 | Dade County Florida | ||||||
Health Facility Authority | |||||||
Hospital Revenue, 5.75%, | |||||||
05/01/2021 (ETM) | 2,523,802 | ||||||
2,500,000 | Florida State Department | ||||||
of Management Services, | |||||||
5.00%, 08/01/2018 | 2,538,175 | ||||||
4,675,000 | Florida State Mid-Bay | ||||||
Bridge Authority | |||||||
Revenue, 6.875%, | |||||||
10/01/2022 (ETM) | 5,989,470 | ||||||
1,500,000 | Gulf Environmental | ||||||
Services Inc. Florida | |||||||
Revenue Bonds, 5.00%, | |||||||
10/01/2018 (ETM) | 1,641,870 | ||||||
2,000,000 | Highlands County Florida | ||||||
Health Facilities Revenue, | |||||||
5.375%, 11/15/2035 | |||||||
(Pre-refunded to | |||||||
11/15/2013) | 2,271,380 | ||||||
2,000,000 | Hillsborough County | ||||||
Florida School Board | |||||||
Master Lease Program, | |||||||
5.50%, 07/01/2018 | |||||||
(Insured by NPFGC) | 2,061,440 | ||||||
2,100,000 | Islands At Doral (SW) | ||||||
Community Development | |||||||
District, 6.375%, | |||||||
05/01/2035 (Pre-refunded | |||||||
to 05/01/2013) | 2,374,008 | ||||||
300,000 | Jacksonville Florida Health | ||||||
Facility Authority Hospital | |||||||
Revenue, 11.50%, | |||||||
10/01/2012 (ETM) | 395,526 | ||||||
1,470,000 | Miami Beach Florida | ||||||
Resort Tax Revenue, | |||||||
6.25%, 10/01/2022 (ETM) | 1,776,583 | ||||||
3,000,000 | Miami Dade County | ||||||
Florida Entitlement | |||||||
Revenue Bonds, | |||||||
5.00%, 08/01/2015 | |||||||
(Insured by NPFGC) | 3,191,760 | ||||||
2,020,000 | Miami-Dade County Florida | ||||||
Water & Sewer Revenue, | |||||||
5.00%, 10/01/2013 | |||||||
(Insured by NPFGC) | 2,158,754 | ||||||
3,885,000 | Oakstead Florida | ||||||
Community Development | |||||||
District Capital | |||||||
Improvement Revenue | |||||||
Bonds, 6.875%, | |||||||
05/01/2033 (Pre-refunded | |||||||
05/01/2012) | 4,412,971 | ||||||
1,060,000 | Orange County Florida | ||||||
Health Facilities Authority | |||||||
Revenue Bond, 6.25%, | |||||||
10/01/2013 (ETM) | 1,228,031 | ||||||
55,000 | Orange County Florida | ||||||
Health Revenue, 8.75%, | |||||||
10/01/2009 (ETM) | 56,069 | ||||||
1,000,000 | Orlando Florida Utilities | ||||||
Commission Water & | |||||||
Electric Revenue, 6.75%, | |||||||
10/01/2017 (ETM) | 1,186,120 | ||||||
1,000,000 | Palm Beach County | ||||||
Florida Revenue, | |||||||
5.00%, 11/01/2018 | 1,079,670 |
The accompanying notes are an integral part of these financial statements.
Page 37
Baird Intermediate Municipal Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
MUNICIPAL BONDS – 92.3% (cont.) | |||||||
Florida – 10.6% (cont.) | |||||||
$ | 1,000,000 | Sarasota County Florida | |||||
School Board, | |||||||
5.00%, 07/01/2015 | |||||||
(Insured by NPFGC) | $ | 1,050,590 | |||||
4,000,000 | Seminole County | ||||||
Florida Water & Sewage | |||||||
Revenue, 6.00%, | |||||||
10/01/2019 (ETM) | 4,643,040 | ||||||
52,948,123 | |||||||
Georgia – 0.2% | |||||||
1,020,000 | Fulton County Georgia | ||||||
Hospital Authority | |||||||
Revenue, 7.875%, | |||||||
10/01/2013 (ETM) | 1,162,769 | ||||||
Illinois – 7.4% | |||||||
1,000,000 | Chicago Illinois Board | ||||||
of Education, 5.00%, | |||||||
12/01/2017 (Insured | |||||||
by AMBAC) | 1,077,390 | ||||||
1,000,000 | Chicago Illinois General | ||||||
Obligation Project and | |||||||
Refunding, 5.00%, | |||||||
01/01/2017 (FSA Insured) | 1,086,360 | ||||||
1,440,000 | Chicago Illinois | ||||||
Metropolitan Water | |||||||
Reclamation District | |||||||
General Obligation, 7.00%, | |||||||
12/01/2010 (ETM) | 1,565,769 | ||||||
1,000,000 | Chicago Illinois Public | ||||||
Building Community | |||||||
Building Revenue, 7.00%, | |||||||
01/01/2020 (ETM) | 1,260,880 | ||||||
2,305,000 | Cook County Illinois | ||||||
School District No. 097, | |||||||
9.00%, 12/01/2015 | |||||||
(Insured by NPFGC) | 3,021,786 | ||||||
1,430,000 | Cook County Illinois | ||||||
School District | |||||||
No. 100, 8.10%, | |||||||
12/01/2016 (ETM) | 1,941,497 | ||||||
1,000,000 | Du Page County Illinois | ||||||
Stormwater Project, | |||||||
5.60%, 01/01/2021 | 1,125,620 | ||||||
2,000,000 | Illinois State Toll Highway | ||||||
Authority Priority Revenue | |||||||
Bonds, 5.50%, 01/01/2016 | |||||||
(Insured by FSA) | 2,276,280 | ||||||
Illinois State Toll Highway | |||||||
Authority Revenue Bonds: | |||||||
820,000 | 5.00%, 01/01/2026 | ||||||
(Pre-refunded to | |||||||
07/01/2016) | 947,247 | ||||||
1,905,000 | 5.00%, 01/01/2031 | ||||||
(Pre-refunded to | |||||||
07/01/2016) | 2,200,618 | ||||||
6,750,000 | Kane & Du Page Counties | ||||||
Illinois Community United | |||||||
School District No. 303, | |||||||
5.00%, 01/01/2014 | |||||||
(Insured by FSA) | 7,410,757 | ||||||
1,025,000 | Lake County Illinois | ||||||
Community High School | |||||||
District No. 124 Grant, | |||||||
5.00%, 12/01/2017 | 1,161,581 | ||||||
1,000,000 | Lake County Illinois | ||||||
Community High School | |||||||
District No. 128, | |||||||
5.00%, 01/01/2013 | 1,106,940 |
The accompanying notes are an integral part of these financial statements.
Page 38
Baird Intermediate Municipal Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
MUNICIPAL BONDS – 92.3% (cont.) | |||||||
Illinois – 7.4% (cont.) | |||||||
McHenry & Kane Counties | |||||||
Illinois Community School | |||||||
District No. 158: | |||||||
$ | 1,870,000 | 0.00%, 01/01/2013 ^ | |||||
(Insured by NPFGC) | $ | 1,596,924 | |||||
1,970,000 | 0.00%, 01/01/2016 ^ | 1,403,113 | |||||
1,805,000 | Metropolitan Pier & | ||||||
Exposition Authority | |||||||
Illinois, 5.50%, | |||||||
06/15/2016 (ETM) | 2,109,251 | ||||||
2,000,000 | Northwest Suburban | ||||||
Illinois Municipal Joint | |||||||
Action Revenue, 5.00%, | |||||||
05/01/2014 (ETM) | 2,272,340 | ||||||
1,390,000 | Southern Illinois | ||||||
University Revenue, | |||||||
5.25%, 04/01/2019 | |||||||
(Insured by NPFGC) | 1,470,231 | ||||||
950,000 | Winnebago & Boone | ||||||
Counties Illinois School | |||||||
District No. 205, | |||||||
5.00%, 02/01/2013 | |||||||
(Insured by AMBAC) | 954,275 | ||||||
1,360,000 | Winnebago County Illinois | ||||||
School District No. 122, | |||||||
0.00%, 01/01/2018 ^ | |||||||
(Insured by FSA) | 979,921 | ||||||
36,968,780 | |||||||
Indiana – 1.2% | |||||||
Hammond Indiana | |||||||
Multi-School Building | |||||||
Corporation Revenue Bonds: | |||||||
1,000,000 | 6.00%, 01/15/2018 (ETM) | 1,148,660 | |||||
1,330,000 | 5.00%, 07/15/2018 | ||||||
(Insured by NPFGC) | 1,488,696 | ||||||
285,000 | Indiana Toll Road | ||||||
Commission, 9.00%, | |||||||
01/01/2015 (ETM) | 350,593 | ||||||
1,650,000 | Purdue University | ||||||
Indiana Revenue, | |||||||
5.00%, 07/01/2015 | 1,857,487 | ||||||
1,000,000 | South Bend Indiana | ||||||
Community School | |||||||
Building Corporation, | |||||||
5.00%, 07/15/2017 | |||||||
(Insured by NPFGC) | 1,088,820 | ||||||
5,934,256 | |||||||
Iowa – 0.6% | |||||||
1,010,000 | Des Moines Iowa | ||||||
Metropolitan Wastewater | |||||||
Reclamation Authority, | |||||||
5.00%, 06/01/2015 | |||||||
(Insured by NPFGC) | 1,114,515 | ||||||
335,000 | Muscatine Iowa Electric | ||||||
Revenue, 6.70%, | |||||||
01/01/2013 (ETM) | 370,724 | ||||||
1,535,000 | Tobacco Settlement | ||||||
Authority Iowa Revenue | |||||||
Bonds, 5.30%, 06/01/2025 | |||||||
(Pre-refunded to | |||||||
06/01/2011) | 1,638,306 | ||||||
3,123,545 | |||||||
Kansas – 0.4% | |||||||
1,865,000 | Wyandotte County | ||||||
Kansas Revenue, 5.00%, | |||||||
09/01/2019 (Insured | |||||||
by BHAC) | 2,110,359 | ||||||
Louisiana – 2.2% | |||||||
400,000 | Houma-Terrebonne Public | ||||||
Trust Financing Authority, | |||||||
7.30%, 04/01/2010 (ETM) | 419,712 |
The accompanying notes are an integral part of these financial statements.
Page 39
Baird Intermediate Municipal Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
MUNICIPAL BONDS – 92.3% (cont.) | |||||||
Louisiana – 2.2% (cont.) | |||||||
$ | 1,000,000 | Houma-Terrebonne | |||||
Public Trust Financing | |||||||
Authority Single Family | |||||||
Mortgage Revenue, 7.30%, | |||||||
04/01/2011 (ETM) | $ | 1,106,120 | |||||
1,450,000 | Jefferson Parish Louisiana | ||||||
Home Mortgage | |||||||
Authority, 7.10%, | |||||||
08/01/2010 (ETM) | 1,551,457 | ||||||
7,355,000 | Louisiana Public Facilities | ||||||
Authority Revenue, 5.50%, | |||||||
05/15/2032 (Pre-refunded | |||||||
to 05/15/2026) | 8,025,408 | ||||||
11,102,697 | |||||||
Massachusetts – 2.1% | |||||||
5,745,000 | Massachusetts State, | ||||||
5.00%, 08/01/2020 | |||||||
(Pre-refunded to | |||||||
08/01/2016) | 6,626,053 | ||||||
1,000,000 | Massachusetts State | ||||||
Obligations Tax Revenue, | |||||||
5.25%, 01/01/2026 | |||||||
(Pre-refunded to | |||||||
01/01/2014) | 1,110,630 | ||||||
2,200,000 | Massachusetts State Water | ||||||
Resources Authority, 6.50%, | |||||||
07/15/2019 (ETM) | 2,663,672 | ||||||
10,400,355 | |||||||
Michigan – 3.3% | |||||||
1,550,000 | Clarkston Michigan | ||||||
Community Schools, | |||||||
5.00%, 05/01/2013 | |||||||
(Insured by FSA) | 1,661,026 | ||||||
1,000,000 | Cornell Twp Michigan | ||||||
Economic Development | |||||||
Revenue, 5.875%, | |||||||
05/01/2018 (Pre-refunded | |||||||
to 05/01/2012) | 1,119,430 | ||||||
1,000,000 | Detroit Michigan City | ||||||
School District, | |||||||
5.00%, 05/01/2016 | |||||||
(Insured by FSA) | 1,019,640 | ||||||
2,185,000 | Detroit Michigan Sewer | ||||||
Disposal Revenue, 5.00%, | |||||||
07/01/2030 (Pre-refunded | |||||||
to 07/01/2015) | 2,486,945 | ||||||
1,550,000 | Harper Creek Michigan | ||||||
Community School District, | |||||||
5.00%, 05/01/2016 | |||||||
(Insured by FSA) | 1,656,222 | ||||||
1,390,000 | Jenison Michigan | ||||||
Public Schools, | |||||||
5.25%, 05/01/2015 | |||||||
(Insured by NPFGC) | 1,526,985 | ||||||
3,000,000 | Livonia Michigan Public | ||||||
Schools School District, | |||||||
5.00%, 05/01/2022 | |||||||
(Insured by NPFGC) | 3,001,050 | ||||||
4,000,000 | Michigan State Housing | ||||||
Development Authority, | |||||||
4.75%, 06/01/2016 | 4,011,520 | ||||||
16,482,818 | |||||||
Minnesota – 1.0% | |||||||
1,040,000 | Centennial Independent | ||||||
School District No. 12 | |||||||
Minnesota, 5.00%, | |||||||
02/01/2014 (Pre-refunded | |||||||
to 02/01/2012, | |||||||
FSA Insured) | 1,112,883 |
The accompanying notes are an integral part of these financial statements.
Page 40
Baird Intermediate Municipal Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
MUNICIPAL BONDS – 92.3% (cont.) | |||||||
Minnesota – 1.0% (cont.) | |||||||
$ | 1,215,000 | Robbinsdale Independent | |||||
School District No. 281, | |||||||
5.00%, 07/01/2020 | |||||||
(Pre-refunded to | |||||||
02/01/2012, | |||||||
FSA Insured) | $ | 1,300,147 | |||||
2,225,000 | Western Minnesota | ||||||
Municipal Power | |||||||
Agency, 6.375%, | |||||||
01/01/2016 (ETM) | 2,530,181 | ||||||
4,943,211 | |||||||
Mississippi – 0.6% | |||||||
1,110,000 | Mississippi Development | ||||||
Bank Special Obligations, | |||||||
5.25%, 10/01/2030 | |||||||
(Pre-refunded to | |||||||
10/01/2015) | 1,273,470 | ||||||
850,000 | Mississippi Housing | ||||||
Financial Corporation, | |||||||
0.00%, 06/01/2015 | |||||||
(ETM) ^ | 715,071 | ||||||
1,000,000 | Mississippi State, 5.00%, | ||||||
11/01/2021 (Pre-refunded | |||||||
to 11/01/2012) | 1,106,050 | ||||||
3,094,591 | |||||||
Missouri – 0.5% | |||||||
2,000,000 | St. Louis County | ||||||
Industrial Development | |||||||
Authority, 6.625%, | |||||||
11/15/2035 (Pre-refunded | |||||||
to 11/15/2013) | 2,398,060 | ||||||
Nebraska – 2.5% | |||||||
1,640,000 | Nebraska Public Power | ||||||
District Revenue, 5.00%, | |||||||
01/01/2015 (Insured | |||||||
by NPFGC) | 1,755,899 | ||||||
9,150,000 | Omaha Nebraska Public | ||||||
Electric Power District | |||||||
Revenue, 6.20%, | |||||||
02/01/2017 (ETM) | 10,833,325 | ||||||
12,589,224 | |||||||
Nevada – 0.9% | |||||||
2,080,000 | Las Vegas Clark County | ||||||
Nevada Library District, | |||||||
5.00%, 01/01/2017 | 2,153,486 | ||||||
1,965,000 | Reno Nevada Capital | ||||||
Improvement Revenue, | |||||||
5.50%, 06/01/2019 | |||||||
(Pre-refunded to | |||||||
06/01/2012) | 2,197,538 | ||||||
4,351,024 | |||||||
New Jersey – 2.1% | |||||||
New Jersey Economic | |||||||
Development Authority | |||||||
Revenue Bonds: | |||||||
1,500,000 | 6.375%, 04/01/2018 | ||||||
(Pre-refunded to | |||||||
05/15/2014) | 1,762,800 | ||||||
3,000,000 | 6.375%, 04/01/2031 | ||||||
(Pre-refunded to | |||||||
05/15/2014) | 3,525,600 | ||||||
1,000,000 | New Jersey State | ||||||
Transportation Trust | |||||||
Fund Authority, 6.00%, | |||||||
12/15/2017 (Pre-refunded | |||||||
to 12/15/2011) | 1,117,460 |
The accompanying notes are an integral part of these financial statements.
Page 41
Baird Intermediate Municipal Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
MUNICIPAL BONDS – 92.3% (cont.) | |||||||
New Jersey – 2.1% (cont.) | |||||||
New Jersey State Turnpike | |||||||
Authority: (ETM) | |||||||
$ | 1,500,000 | 6.50%, 01/01/2016 | $ | 1,763,295 | |||
130,000 | 6.50%, 01/01/2016 | 152,182 | |||||
2,000,000 | Tobacco Settlement | ||||||
Financing Corporation, | |||||||
6.25%, 06/01/2043 | |||||||
(Pre-refunded to | |||||||
06/01/2013) | 2,341,360 | ||||||
10,662,697 | |||||||
New Mexico – 0.2% | |||||||
1,000,000 | New Mexico State Hospital | ||||||
Equipment Loan Council | |||||||
Hospital Revenue, 5.25%, | |||||||
07/01/2025 (Pre-refunded | |||||||
to 07/01/2015) | 1,128,290 | ||||||
New York – 2.3% | |||||||
4,730,000 | New York City, New York | ||||||
Transitional Financial | |||||||
Authority Building Aid | |||||||
Revenue Bonds, | |||||||
5.00%, 01/15/2015 | |||||||
(Insured by FSA) | 5,076,189 | ||||||
2,000,000 | New York State Dormitory | ||||||
Authority and Personal | |||||||
Income Tax Revenue, | |||||||
5.00%, 12/15/2017 | 2,214,500 | ||||||
1,800,000 | New York State University | ||||||
Dormitory Authority | |||||||
Revenue, 5.50%, 05/15/2013 | |||||||
(Insured by NPFGC) | 1,930,446 | ||||||
New York, New York: | |||||||
1,000,000 | 5.00%, 03/01/2016 | ||||||
(FGIC Insured) | 1,070,980 | ||||||
1,125,000 | 5.25%, 08/15/2021 | 1,185,705 | |||||
190,000 | TSASC Inc. New York, | ||||||
4.75%, 06/01/2022 | 163,248 | ||||||
11,641,068 | |||||||
North Carolina – 3.1% | |||||||
North Carolina Eastern | |||||||
Municipal Power Agency | |||||||
Power Systems Revenue: | |||||||
(ETM) | |||||||
2,370,000 | 5.00%, 01/01/2017 | 2,644,612 | |||||
225,000 | 6.40%, 01/01/2021 | 272,842 | |||||
4,900,000 | 4.50%, 01/01/2024 | ||||||
(Pre-refunded to | |||||||
01/01/2022) | 5,249,713 | ||||||
6,495,000 | North Carolina Medical | ||||||
Care Community Hospital | |||||||
Revenue, 5.25%, | |||||||
11/01/2029 (Pre-refunded | |||||||
to 11/01/2014) | 7,242,120 | ||||||
15,409,287 | |||||||
Ohio – 0.7% | |||||||
1,000,000 | Akron Ohio Community | ||||||
Learning Center Income | |||||||
Tax Revenue, 5.25%, | |||||||
12/01/2016 (Insured | |||||||
by NPFGC) | 1,039,320 | ||||||
2,000,000 | Cincinnati Ohio City | ||||||
School District, | |||||||
5.00%, 12/01/2016 | |||||||
(Insured by FSA) | 2,213,320 | ||||||
130,000 | Miamisburg Ohio Water | ||||||
Revenue, 7.00%, | |||||||
11/15/2016 (ETM) | 151,804 | ||||||
3,404,444 |
The accompanying notes are an integral part of these financial statements.
Page 42
Baird Intermediate Municipal Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
MUNICIPAL BONDS – 92.3% (cont.) | |||||||
Oklahoma – 0.5% | |||||||
$ | 2,360,000 | Tulsa County Oklahoma | |||||
Home Financing Authority | |||||||
Single Family Mortgage | |||||||
Revenue, 6.90%, | |||||||
08/01/2011 (ETM) | $ | 2,641,359 | |||||
Pennsylvania – 6.1% | |||||||
1,275,000 | Central Dauphin | ||||||
Pennsylvania School | |||||||
District, 6.75%, | |||||||
02/01/2024 (Pre-refunded | |||||||
to 02/01/2016) | 1,587,388 | ||||||
6,570,000 | Pennsylvania Convention | ||||||
Center Authority Revenue | |||||||
Bonds, 6.00%, | |||||||
09/01/2019 (ETM) | 7,757,856 | ||||||
3,390,000 | Pennsylvania State Higher | ||||||
Education Facilities | |||||||
Authority Revenue, 5.00%, | |||||||
01/01/2029 (Pre-refunded | |||||||
to 01/01/2013) | 3,771,951 | ||||||
3,000,000 | Pennsylvania State Public | ||||||
School Building Authority | |||||||
Lease Revenue, 5.00%, | |||||||
11/15/2034 (Pre-refunded | |||||||
to 11/15/2014) | 3,389,910 | ||||||
1,790,000 | Philadelphia Pennsylvania | ||||||
Authority For Industrial | |||||||
Development Revenue, | |||||||
5.25%, 01/01/2027 | |||||||
(Pre-refunded to | |||||||
01/01/2017) | 2,060,845 | ||||||
3,350,000 | Philadelphia Pennsylvania | ||||||
Gas Works, 7.00%, | |||||||
05/15/2020 (ETM) | 4,027,001 | ||||||
Pittsburgh Pennsylvania | |||||||
Water & Sewer Authority | |||||||
Revenue Bonds: | |||||||
1,025,000 | 7.25%, 09/01/2014 | ||||||
(ETM) | 1,168,992 | ||||||
4,500,000 | 5.00%, 09/01/2029 | ||||||
(Pre-refunded to | |||||||
09/01/2015) | 5,055,840 | ||||||
1,500,000 | St. Mary Hospital | ||||||
Authority Pennsylvania | |||||||
Health Revenue, 5.375%, | |||||||
11/15/2034 (Pre-refunded | |||||||
to 11/15/2014) | 1,727,145 | ||||||
30,546,928 | |||||||
Puerto Rico – 0.3% | |||||||
1,080,000 | Puerto Rico Public Finance | ||||||
Corporation, 6.00%, | |||||||
08/01/2026 (ETM) | 1,277,240 | ||||||
South Carolina – 1.9% | |||||||
285,000 | Greenville South | ||||||
Carolina Waterworks | |||||||
Revenue, 7.00%, | |||||||
02/01/2010 (ETM) | 295,722 | ||||||
4,500,000 | Lexington County South | ||||||
Carolina Health Services | |||||||
District Hospital Revenue, | |||||||
5.50%, 11/01/2032 | |||||||
(Pre-refunded to | |||||||
11/01/2013) | 5,178,735 | ||||||
3,800,000 | South Carolina Jobs | ||||||
Economic Development | |||||||
Authority Hospital | |||||||
Facilities Revenue, 7.375%, | |||||||
12/15/2021 (Pre-refunded | |||||||
to 12/15/2010) | 4,169,550 | ||||||
9,644,007 |
The accompanying notes are an integral part of these financial statements.
Page 43
Baird Intermediate Municipal Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
MUNICIPAL BONDS – 92.3% (cont.) | |||||||
South Dakota – 0.3% | |||||||
$ | 1,175,000 | Heartland Consumers | |||||
Power District, 7.00%, | |||||||
01/01/2016 (ETM) | $ | 1,380,742 | |||||
Tennessee – 1.6% | |||||||
230,000 | Metropolitan Government | ||||||
Nashville & Davidson County | |||||||
Tennessee H&E, 6.10%, | |||||||
07/01/2010 (ETM) | 234,878 | ||||||
1,545,000 | Metropolitan Government | ||||||
Nashville & Davidson | |||||||
County Tennessee Water | |||||||
& Sewer Revenue, 6.50%, | |||||||
12/01/2014 (ETM) | 1,886,044 | ||||||
5,000,000 | Shelby County Tennessee | ||||||
Health Educational & | |||||||
Housing Facilities | |||||||
Revenue, 5.50%, | |||||||
08/15/2019 (ETM) | 5,635,300 | ||||||
7,756,222 | |||||||
Texas – 16.4% | |||||||
1,125,000 | Barbers Hill Texas | ||||||
Independent School | |||||||
District General Obligation, | |||||||
5.00%, 02/15/2017 | |||||||
(PSF Guaranteed) | 1,236,049 | ||||||
6,060,000 | Capital Area Housing | ||||||
Finance Corporation | |||||||
Texas, 0.00%, | |||||||
01/01/2016 (ETM) ^ | 4,929,083 | ||||||
1,500,000 | Central Texas Housing | ||||||
Finance Corporation, 0.00%, | |||||||
09/01/2016 (ETM) ^ | 1,177,755 | ||||||
1,000,000 | Copperas Cove Texas | ||||||
Independent School District, | |||||||
5.00%, 08/15/2016 | |||||||
(PSF Guaranteed) | 1,119,130 | ||||||
1,500,000 | Cypress-Fairbanks Texas | ||||||
Independent School District, | |||||||
5.00%, 02/15/2017 | |||||||
(PSF Guaranteed) | 1,662,450 | ||||||
1,355,000 | El Paso Texas Waterworks | ||||||
& Sewer Revenue, | |||||||
5.00%, 08/15/2018 | 1,506,719 | ||||||
1,625,000 | Frisco Texas Independent | ||||||
School District, | |||||||
6.00%, 08/15/2018 | |||||||
(PSF Guaranteed) | 1,898,666 | ||||||
1,000,000 | Georgetown Texas | ||||||
Independent School | |||||||
District, 5.00%, | |||||||
02/15/2016 | |||||||
(PSF Guaranteed) | 1,110,130 | ||||||
2,000,000 | Harris County Texas, | ||||||
5.25%, 10/01/2017 | |||||||
(Pre-refunded to | |||||||
10/01/2013) | 2,284,540 | ||||||
Harris County Texas | |||||||
Health Facilities | |||||||
Development Corporation | |||||||
Hospital Revenue: (ETM) | |||||||
8,000,000 | 5.50%, 10/01/2013 | 8,844,640 | |||||
1,720,000 | 5.50%, 10/01/2019 | 1,991,622 | |||||
7,250,000 | Houston Texas Health | ||||||
Facilities Corporate | |||||||
Facilities Revenue, | |||||||
7.125%, 02/15/2034 | |||||||
(Pre-refunded to | |||||||
02/15/2014) | 8,723,200 |
The accompanying notes are an integral part of these financial statements.
Page 44
Baird Intermediate Municipal Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
MUNICIPAL BONDS – 92.3% (cont.) | |||||||
Texas – 16.4% (cont.) | |||||||
$ | 1,920,000 | Houston Texas Sewer | |||||
System Revenue, 9.375%, | |||||||
10/01/2013 (ETM) | $ | 2,246,650 | |||||
1,315,000 | La Porte Texas | ||||||
Independent | |||||||
School District, | |||||||
5.00%, 02/15/2018 | |||||||
(Insured by NPFGC) | 1,420,174 | ||||||
1,735,000 | Lufkin Texas Independent | ||||||
School District, | |||||||
5.00%, 08/15/2015 | |||||||
(PSF Guaranteed) | 1,929,424 | ||||||
1,050,000 | Magnolia Texas | ||||||
Independent School | |||||||
District, 5.00%, | |||||||
08/15/2016 | |||||||
(PSF Guaranteed) | 1,189,965 | ||||||
1,265,000 | Mission Consolidation | ||||||
Independent School | |||||||
District, 5.00%, | |||||||
02/15/2019 | |||||||
(PSF Guaranteed) | 1,355,498 | ||||||
1,125,000 | North Central Texas | ||||||
Health Facilities Revenue, | |||||||
5.75%, 02/15/2015 (ETM) | 1,283,569 | ||||||
1,210,000 | Pearland Texas Waterworks | ||||||
& Sewage, 5.25%, | |||||||
03/01/2023 (Pre-refunded | |||||||
to 03/01/2014) | 1,379,811 | ||||||
1,295,000 | Rockwall Texas Independent | ||||||
School District, 5.00%, | |||||||
02/15/2015 | |||||||
(PSF Guaranteed) | 1,461,239 | ||||||
775,000 | Sam Rayburn Texas | ||||||
Municipal Power Agency, | |||||||
6.00%, 09/01/2010 (ETM) | 795,615 | ||||||
11,565,000 | San Antonio Texas Electric | ||||||
& Gas Revenue, 5.65%, | |||||||
02/01/2019 (ETM) | 13,477,273 | ||||||
2,100,000 | San Antonio Texas Hotel | ||||||
Occupancy Tax Revenue | |||||||
Bonds, 0.00%, | |||||||
08/15/2015 (ETM) ^ | 1,761,333 | ||||||
2,000,000 | San Antonio Texas | ||||||
Independent School District, | |||||||
5.00%, 08/15/2017 | |||||||
(PSF Guaranteed) | 2,213,440 | ||||||
575,000 | Socorro Texas Independent | ||||||
School District, | |||||||
5.25%, 08/15/2012 | |||||||
(PSF Guaranteed) | 639,866 | ||||||
1,000,000 | Spring Texas Independent | ||||||
School District, | |||||||
5.00%, 08/15/2019 | |||||||
(PSF Guaranteed) | 1,116,090 | ||||||
7,750,000 | Tarrant County Texas | ||||||
Health Facilities Revenue, | |||||||
6.00%, 09/01/2024 (ETM) | 9,168,792 | ||||||
835,000 | Tarrant County Texas | ||||||
Housing Finance | |||||||
Corporation Revenue | |||||||
Bonds, 0.00%, | |||||||
09/15/2016 (ETM) ^ | 654,757 | ||||||
265,000 | Texas Public Building | ||||||
Authority Revenue, 7.125%, | |||||||
08/01/2011 (ETM) | 280,060 | ||||||
1,900,000 | Trinity River Authority | ||||||
Texas Revenue, 5.50%, | |||||||
02/01/2021 (Pre-refunded | |||||||
to 02/01/2013, Insured | |||||||
by NPFGC) | 2,151,826 |
The accompanying notes are an integral part of these financial statements.
Page 45
Baird Intermediate Municipal Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
MUNICIPAL BONDS – 92.3% (cont.) | |||||||
Texas – 16.4% (cont.) | |||||||
$ | 1,000,000 | University of Houston Texas, | |||||
5.25%, 02/15/2012 | |||||||
(FSA Insured) | $ | 1,099,070 | |||||
82,108,436 | |||||||
Utah – 0.1% | |||||||
470,000 | Salt Lake City Utah | ||||||
Hospital Revenue, | |||||||
8.125%, 05/15/2015 | |||||||
(ETM) | 544,937 | ||||||
Virginia – 1.0% | |||||||
1,095,000 | Bristol Virginia Utility | ||||||
Systems General | |||||||
Obligations, 5.50%, | |||||||
11/01/2018 (ETM) | 1,261,396 | ||||||
3,165,000 | Tobacco Settlement | ||||||
Financing Corporation | |||||||
Revenue, 5.625%, | |||||||
06/01/2037 (Pre-refunded | |||||||
to 06/01/2015) | 3,629,717 | ||||||
4,891,113 | |||||||
Washington – 0.2% | |||||||
1,000,000 | Snohomish County | ||||||
Washington Public Utilities | |||||||
Revenue, 6.80%, | |||||||
01/01/2020 (ETM, | |||||||
Insured by NPFGC) | 1,212,610 | ||||||
West Virginia – 1.3% | |||||||
7,365,000 | Berkeley Brooke Fayette | ||||||
Counties West Virginia | |||||||
Single Family Mortgage | |||||||
Revenue, 0.00%, | |||||||
12/01/2014 (ETM) ^ | 6,287,206 | ||||||
Wisconsin – 2.9% | |||||||
7,390,000 | Badger Tobacco Asset | ||||||
Securitization Corporation | |||||||
Wisconsin, 6.375%, | |||||||
06/01/2032 (Pre-refunded | |||||||
to 06/01/2012) | 8,259,434 | ||||||
3,000,000 | Ladysmith-Hawkins | ||||||
Wisconsin School District | |||||||
General Obligation, | |||||||
5.20%, 04/01/2018 | |||||||
(Insured by NPFGC) | 2,946,120 | ||||||
3,320,000 | Wisconsin State Health | ||||||
& Educational | |||||||
Facilities Revenue, | |||||||
5.00%, 12/01/2019 | |||||||
(Insured by NPFGC) | 3,329,196 | ||||||
14,534,750 | |||||||
Total Municipal Bonds | |||||||
(Cost $453,248,331) | 462,180,570 | ||||||
Shares | |||||||
SHORT-TERM INVESTMENTS – 6.0% | |||||||
Money Market Fund – 6.0% | |||||||
30,060,494 | Fidelity Institutional | ||||||
Tax-Exempt Portfolio, | 30,060,494 | ||||||
Total Short-Term | |||||||
Investments | |||||||
(Cost $30,060,494) | 30,060,494 | ||||||
Total Investments | |||||||
(Cost $483,308,825) – | |||||||
98.3% | 492,241,064 | ||||||
Other Assets in Excess | |||||||
of Liabilities – 1.7% | 8,658,007 | ||||||
TOTAL NET | |||||||
ASSETS – 100.0% | $ | 500,899,071 |
ETM – Escrowed to Maturity
^ | Non-Income Producing |
The accompanying notes are an integral part of these financial statements.
Page 46
Baird Intermediate Municipal Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
SFAS 157 – Summary of Fair Value Exposure at June 30, 2009
As adopted by the Fund, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“SFAS 157”) defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. Under SFAS 157, various inputs are used in determining the value of the Fund’s investments. These inputs are summarized into three broad levels and described below:
Level 1 – | Quoted prices in active markets for identical securities. |
Level 2 – | Other significant observable inputs (including quoted prices for similar securities, quoted prices for identical securities in inactive markets, dealer indications, interest rates, yield curves, benchmark yields, issuer spreads, prepayment speeds, cash flows, credit risk, default rates, information about issuers, sectors and markets, inputs corroborated by observable market data, etc.) |
Level 3 – | Significant unobservable inputs (including the Fund’s own assumptions about the assumptions that market participants would use in pricing the security). |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Fund’s investments as of June 30, 2009:
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Fixed Income | ||||||||||||||||
Municipal Bonds | $ | — | $ | 462,180,570 | $ | — | $ | 462,180,570 | ||||||||
Total Fixed Income | — | 462,180,570 | — | 462,180,570 | ||||||||||||
Short-Term Investments | ||||||||||||||||
Money Market Mutual Funds | 30,060,494 | — | — | 30,060,494 | ||||||||||||
Total Short-Term Investments | 30,060,494 | — | — | 30,060,494 | ||||||||||||
Total Investments in Securities | $ | 30,060,494 | $ | 462,180,570 | $ | — | $ | 492,241,064 |
Page 47
Baird Aggregate Bond Fund
The Baird Aggregate Bond Fund seeks an annual rate of total return, before Fund expenses, greater than the annual rate of total return of the Barclays Capital U.S. Aggregate Bond Index. The Barclays Capital 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 securities, with maturities of at least one year.
Portfolio Characteristics
Quality Distribution* | Sector Weightings* |
Net Assets: | $986,318,048 | Annualized Expense Ratio: | ||||
SEC 30-Day Yield:** | Institutional Class: | 0.30 | % | |||
Institutional Class: | 5.95% | Investor Class: | 0.55 | %*** | ||
Investor Class: | 5.72% | Portfolio Turnover Rate: | 21.2 | %%# | ||
Average Effective Duration: | 4.30 years | Total Number of Holdings: | 414 | |||
Average Effective Maturity: | 6.35 years |
* | Percentages shown are based on the Fund’s total net assets. |
** | SEC yields are based on SEC guidelines and are calculated for the 30 days ended June 30, 2009. |
*** | Includes 0.25% 12b-1 fee. |
# | Not annualized. |
Page 48
Baird Aggregate Bond Fund
Average Annual Total Returns
Since | |||
For the Periods Ended June 30, 2009 | One Year | Five Years | Inception(1) |
Institutional Class Shares | 1.90% | 3.91% | 5.66% |
Investor Class Shares | 1.50% | 3.62% | 5.41% |
Barclays Capital U.S. Aggregate Bond Index(2) | 6.05% | 5.01% | 5.96% |
(1) | For the period from September 29, 2000 (commencement of operations) through June 30, 2009. |
(2) | The Barclays Capital 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 securities, with maturities of at least one year. This index does not reflect any deduction for fees, expenses or taxes. A direct investment in an index is not possible. |
The returns shown in the table above reflect reinvestment of dividends and/or capital gains distributions in additional shares. The returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Past performance does not guarantee future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.
For information about the performance of the Fund as of the most recent month-end, please call 1-866-44BAIRD or visit www.bairdfunds.com. Mutual fund performance changes over time and current performance may be lower or higher than that stated.
Page 49
Baird Aggregate Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 95.8% | |||||||
Asset Backed Securities – 5.3% | |||||||
$ | 8,000,000 | American Express Credit | |||||
Account Master Trust, | |||||||
Series 2005-5, Class A, | |||||||
4.276%, 02/15/2013 | $ | 7,930,857 | |||||
Bayview Financial | |||||||
Acquisition Trust: | |||||||
2,000,000 | Series 2006-A, Class 1A2, | ||||||
5.483%, 02/28/2041 | 1,448,729 | ||||||
5,000,000 | Series 2007-B, Class 1A2, | ||||||
6.831%, 08/28/2047 | 2,016,595 | ||||||
1,525,000 | Chase Issuance Trust, | ||||||
Series 2005-A10, Class | |||||||
A10, 4.65%, 12/17/2012 | 1,574,765 | ||||||
Contimortgage Home | |||||||
Equity Trust: | |||||||
1,073 | Series 1997-2, Class A9, | ||||||
7.09%, 04/15/2028 | 995 | ||||||
5,955 | Series 1999-3, Class A8, | ||||||
5.884%, 05/25/2029 | 5,876 | ||||||
Countrywide | |||||||
Asset-Backed Certificates: | |||||||
4,004,824 | Series 2006-S2, Class A2, | ||||||
5.627%, 07/25/2027 | 2,822,246 | ||||||
1,693,429 | Series 2005-17, | ||||||
Class 1AF2, 5.363%, | |||||||
03/25/2030 | 1,230,850 | ||||||
1,424,534 | Series 2004-15, | ||||||
Class AF6, 4.613%, | |||||||
04/25/2035 | 851,604 | ||||||
4,772,765 | Series 2005-1, Class AF6, | ||||||
5.03%, 07/25/2035 | 3,160,232 | ||||||
4,905,016 | Series 2005-10, | ||||||
Class AF6, 4.915%, | |||||||
02/25/2036 | 2,658,768 | ||||||
1,975,697 | Series 2005-17, | ||||||
Class 1AF5, 5.564%, | |||||||
05/25/2036 | 972,849 | ||||||
2,715,504 | Series 2007-S1, | ||||||
Class A6, | |||||||
5.693%, 11/25/2036 | 1,086,239 | ||||||
7,000,000 | Series 2006-13, | ||||||
Class 1AF2, 5.884%, | |||||||
01/25/2037 | 5,545,994 | ||||||
1,500,000 | Series 2006-10, | ||||||
Class 1AF3, 5.971%, | |||||||
09/25/2046 | 728,587 | ||||||
922,841 | Credit Based Asset | ||||||
Servicing and Securities, | |||||||
Series 2005-CB8, | |||||||
Class AF2, 5.303%, | |||||||
12/25/2035 | 819,555 | ||||||
Discover Card | |||||||
Master Trust I: | |||||||
1,700,000 | Series 2004-2, Class A2, | ||||||
4.31%, 05/15/2012 | 1,696,536 | ||||||
2,000,000 | Series 2003-4, Class A2, | ||||||
1.32%, 05/15/2013 | 1,964,635 | ||||||
239,585 | Equivantage Home | ||||||
Equity Loan Trust, | |||||||
Series 1996-3, Class A3, | |||||||
7.70%, 09/25/2027 | 192,199 | ||||||
GE Capital Mortgage | |||||||
Services, Inc.: | |||||||
2,205 | Series 1997-HE4, | ||||||
Class A7, 6.735%, | |||||||
12/25/2028 | 2,179 | ||||||
31,795 | Series 1999-HE1, | ||||||
Class A7, 6.265%, | |||||||
04/25/2029 | 28,243 |
The accompanying notes are an integral part of these financial statements.
Page 50
Baird Aggregate Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 95.8% (cont.) | |||||||
Asset Backed Securities – 5.3% (cont.) | |||||||
$ | 59,675 | GMAC Mortgage | |||||
Corporation Loan Trust, | |||||||
Series 2004-GH1, | |||||||
Class A2, 4.39%, | |||||||
12/25/2025 | $ | 56,746 | |||||
Green Tree Financial | |||||||
Corporation: | |||||||
1,022,787 | Series 1993-3, Class A7, | ||||||
6.40%, 10/15/2018 | 945,822 | ||||||
765,374 | Series 1993-4, Class A5, | ||||||
7.05%, 01/15/2019 | 711,667 | ||||||
1,937,083 | Series 1998-2, Class A5, | ||||||
6.24%, 12/01/2028 | 1,688,279 | ||||||
129,080 | Series 1997-6, Class A8, | ||||||
7.07%, 01/15/2029 | 121,269 | ||||||
1,584,938 | Series 1998-3, Class A5, | ||||||
6.22%, 03/01/2030 | 1,271,529 | ||||||
960,438 | Series 1998-4, Class A5, | ||||||
6.18%, 04/01/2030 | 773,912 | ||||||
1,079,725 | GSAA Home Equity | ||||||
Trust, Series 2005-1, | |||||||
Class AF2, 4.316%, | |||||||
11/25/2034 | 993,477 | ||||||
98,707 | IMC Home Equity Loan | ||||||
Trust, Series 1997-5, | |||||||
Class A10, 5.749%, | |||||||
11/20/2028 | 91,984 | ||||||
212,125 | Impac CMB Trust, | ||||||
Series 2004-4, Class 2A2, | |||||||
5.249%, 09/25/2034 | 157,622 | ||||||
3,200,000 | MBNA Master Credit | ||||||
Card Trust, Series | |||||||
2005-4A, Class A4, | |||||||
3.38%, 11/15/2012 | 3,170,740 | ||||||
92,562 | Oakwood Mortgage | ||||||
Investors, Inc., | |||||||
Series 1999-B, Class A3, | |||||||
6.45%, 11/15/2017 | 56,463 | ||||||
1,098,651 | RAAC Series, | ||||||
Series 2004-SP1, | |||||||
Class AI4, 5.285%, | |||||||
08/25/2027 | 915,498 | ||||||
3,000,000 | Renaissance Home | ||||||
Equity Loan Trust, | |||||||
Series 2007-1, Class AF3, | |||||||
5.612%, 04/25/2037 | 815,696 | ||||||
Residential Asset | |||||||
Mortgage Products, Inc.: | |||||||
1,293,708 | Series 2003-RS7, | ||||||
Class AI6, 5.34%, | |||||||
08/25/2033 | 1,012,948 | ||||||
899,604 | Series 2005-RS1, | ||||||
Class AI6, 4.713%, | |||||||
01/25/2035 | 631,931 | ||||||
Residential Asset | |||||||
Securities Corporation: | |||||||
256,865 | Series 2003-KS5, | ||||||
Class AI6, 3.62%, | |||||||
07/25/2033 | 142,941 | ||||||
256,283 | Series 2004-KS2, | ||||||
Class AI6, 4.30%, | |||||||
03/25/2034 | 179,955 | ||||||
2,600,000 | Stingray Pass-Thru | ||||||
Certificates, Series 2005, | |||||||
5.902%, 01/12/2015 | |||||||
(Acquired 05/10/2007 | |||||||
and 09/19/2007; Cost | |||||||
$1,538,444 and | |||||||
$815,411, | |||||||
respectively) # ** | 1,300,000 |
The accompanying notes are an integral part of these financial statements.
Page 51
Baird Aggregate Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 95.8% (cont.) | |||||||
Asset Backed Securities – 5.3% (cont.) | |||||||
$ | 1,410,695 | Structured Asset | |||||
Securities Corporation, | |||||||
Series 2005-7XS, | |||||||
Class 1A4B, 5.44%, | |||||||
04/25/2035 | $ | 801,483 | |||||
52,578,495 | |||||||
Financial – 16.6% | |||||||
2,450,000 | American Express Credit | ||||||
Corporation, Series C, | |||||||
7.30%, 08/20/2013 | 2,547,287 | ||||||
American General Finance | |||||||
Corporation Senior Notes: | |||||||
1,250,000 | 8.45%, 10/15/2009 | 1,201,986 | |||||
1,150,000 | 4.875%, 05/15/2010 | 967,569 | |||||
1,000,000 | 5.85%, 06/01/2013 | 573,639 | |||||
500,000 | 6.90%, 12/15/2017 | 270,741 | |||||
1,000,000 | American International | ||||||
Group, 8.175%, | |||||||
05/15/2058 (Callable | |||||||
05/15/2038) (Acquired | |||||||
05/13/2008; Cost | |||||||
$1,000,000)* | 285,296 | ||||||
2,000,000 | Ameriprise Financial, Inc. | ||||||
7.30%, 06/28/2019 | 2,046,618 | ||||||
250,000 | AmSouth Bancorporation | ||||||
Subordinated Debentures, | |||||||
6.75%, 11/01/2025 | 169,859 | ||||||
2,330,000 | Axa Financial, Inc., | ||||||
7.75%, 08/01/2010 | 2,336,410 | ||||||
300,000 | BAC Capital Trust VI, | ||||||
5.625%, 03/08/2035 | 195,817 | ||||||
1,265,000 | Bank of America | ||||||
Corporation | |||||||
Subordinated Notes, | |||||||
10.20%, 07/15/2015 | 1,322,990 | ||||||
2,435,000 | Bank of Tokyo- | ||||||
Mitsubishi/UFJ NY, | |||||||
7.40%, 06/15/2011 f | 2,505,474 | ||||||
929,000 | Bank One Corporation | ||||||
Subordinated Notes, | |||||||
10.00%, 08/15/2010 | 987,962 | ||||||
2,175,000 | Banponce Trust I, Series A, | ||||||
8.327%, 02/01/2027 | |||||||
(Callable 09/08/2009) | 1,278,828 | ||||||
2,500,000 | Barclays Bank Plc, | ||||||
6.75%, 05/22/2019 f | 2,479,430 | ||||||
2,400,000 | Bear Stearns Cos., | ||||||
Inc., Series B, | |||||||
6.95%, 08/10/2012 | 2,608,450 | ||||||
1,500,000 | BOI Capital Funding II, | ||||||
5.571%, 02/01/2016 | |||||||
(Acquired 09/03/2008; | |||||||
Cost $990,386) * f | 562,500 | ||||||
2,000,000 | BOI Capital Funding III, | ||||||
6.107%, 02/04/2016 f | 750,000 | ||||||
2,000,000 | Capmark Financial | ||||||
Group, Inc., | |||||||
6.30%, 05/10/2017 | 471,630 | ||||||
2,967,000 | CIT Group Funding | ||||||
Company of Canada, | |||||||
5.20%, 06/01/2015 f | 1,718,750 | ||||||
CIT Group, Inc.: | |||||||
500,000 | 5.40%, 01/30/2016 | 282,334 | |||||
1,670,000 | 6.10%, 03/15/2067 | ||||||
(Callable 03/15/2017) | 633,414 | ||||||
2,000,000 | Citigroup Capital XXI, | ||||||
8.30%, 12/21/2057 | |||||||
(Callable 12/21/2037) | 1,559,650 | ||||||
1,000,000 | Citigroup, Inc., | ||||||
5.50%, 04/11/2013 | 937,245 |
The accompanying notes are an integral part of these financial statements.
Page 52
Baird Aggregate Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 95.8% (cont.) | |||||||
Financial – 16.6% (cont.) | |||||||
$ | 1,281,000 | Compass Bank | |||||
Subordinated Notes, | |||||||
8.10%, 08/15/2009 | $ | 1,279,985 | |||||
Corp Andina | |||||||
De Fomento Notes: f | |||||||
675,000 | 7.375%, 01/18/2011 | 706,377 | |||||
340,000 | 5.75%, 01/12/2017 | 327,538 | |||||
3,575,000 | Countrywide Financial | ||||||
Corporation Subordinated | |||||||
Notes, 6.25%, 05/15/2016 | 3,171,651 | ||||||
1,000,000 | Credit Agricole S.A., | ||||||
6.637%, 05/29/2049 | |||||||
(Acquired 05/23/2007; | |||||||
Cost $1,000,000) * f | 587,500 | ||||||
330,000 | Deutsche Bank Trust | ||||||
Corporation Subordinated | |||||||
Notes, 7.25%, 10/15/2011 | 347,953 | ||||||
3,500,000 | Fifth Third Bank, | ||||||
4.20%, 02/23/2010 | 3,497,438 | ||||||
3,135,000 | First Empire Capital Trust | ||||||
I, 8.234%, 02/01/2027 | |||||||
(Callable 09/08/2009) | 2,067,263 | ||||||
1,575,000 | First Empire Capital Trust II, | ||||||
8.277%, 06/01/2027 | |||||||
(Callable 09/08/2009) | 1,040,469 | ||||||
3,500,000 | First Hawaiian Capital | ||||||
Trust I, Series B, | |||||||
8.343%, 07/01/2027 | |||||||
(Callable 09/08/2009) | 2,673,853 | ||||||
686,508 | First National Bank of | ||||||
Chicago Pass-Thru | |||||||
Certificates, Series 1993-A, | |||||||
8.08%, 01/05/2018 | 757,259 | ||||||
4,475,000 | First National | ||||||
Bank of Omaha | |||||||
Subordinated Notes, | |||||||
7.32%, 12/01/2010 | 4,393,640 | ||||||
1,748,000 | First Union Capital I, | ||||||
Series A, 7.935%, | |||||||
01/15/2027 (Callable | |||||||
09/08/2009) | 1,583,456 | ||||||
5,107,000 | First Union | ||||||
Institutional Capital I, | |||||||
8.04%, 12/01/2026 | |||||||
(Callable 09/08/2009) | 4,211,569 | ||||||
1,460,000 | First Union | ||||||
Institutional Capital II, | |||||||
7.85%, 01/01/2027 | |||||||
(Callable 09/08/2009) | 1,181,346 | ||||||
2,500,000 | Fleet Capital Trust II, | ||||||
7.92%, 12/11/2026 | |||||||
(Callable 09/08/2009) | 2,049,805 | ||||||
2,300,000 | FMR LLC Notes, | ||||||
4.75%, 03/01/2013 | |||||||
(Acquired 02/26/2003 – | |||||||
12/21/2007; Aggregate | |||||||
Cost $2,236,498) * | 2,162,253 | ||||||
1,000,000 | GE Global Insurance | ||||||
Holding Corporation., | |||||||
7.50%, 06/15/2010 | 997,787 | ||||||
General Electric | |||||||
Capital Corporation: | |||||||
2,030,000 | 5.50%, 11/15/2011 | ||||||
(Callable 11/15/2009) | 2,035,018 | ||||||
889,000 | 1.146%, 08/02/2012 | 805,422 | |||||
1,100,000 | 5.90%, 05/13/2014 | 1,122,727 |
The accompanying notes are an integral part of these financial statements.
Page 53
Baird Aggregate Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 95.8% (cont.) | |||||||
Financial – 16.6% (cont.) | |||||||
$ | 2,175,000 | Glencore Funding LLC, | |||||
6.00%, 04/15/2014 | |||||||
(Acquired 03/31/2004 – | |||||||
06/19/2008; Aggregate | |||||||
Cost $2,123,673) * | $ | 1,796,354 | |||||
GMAC LLC: | |||||||
100,000 | 7.25%, 03/02/2011 | 90,736 | |||||
336,000 | 7.50%, 12/31/2013 | ||||||
(Acquired 06/21/2005 – | |||||||
10/17/2007; Aggregate | |||||||
Cost $1,148,100) * | 260,400 | ||||||
150,000 | 6.75%, 12/01/2014 | 115,316 | |||||
403,000 | 8.00%, 12/31/2018 | ||||||
(Acquired 06/21/2005 – | |||||||
10/17/2007; Aggregate | |||||||
Cost $1,471,986) * | 255,905 | ||||||
1,180,000 | Goldman Sachs Capital I, | ||||||
6.345%, 02/15/2034 | 951,974 | ||||||
1,000,000 | Goldman Sachs Group Inc., | ||||||
7.50%, 02/15/2019 | 1,070,772 | ||||||
500,000 | Goldman Sachs Group LP, | ||||||
8.00%, 03/01/2013 | |||||||
(Acquired 01/05/2009; | |||||||
Cost $500,000) * | 541,524 | ||||||
2,800,000 | Great West Life & | ||||||
Annuity Insurance, | |||||||
7.153%, 05/16/2046 | |||||||
(Acquired 05/16/2006 | |||||||
and 11/08/2007; | |||||||
Cost $1,000,000 and | |||||||
$1,783,656, respectively) * | 2,156,000 | ||||||
2,200,000 | Hartford Financial | ||||||
Services Group Inc., | |||||||
8.125%, 06/15/2068 | |||||||
(Callable 06/15/2018) | 1,540,000 | ||||||
950,000 | HSBC Bank PLC | ||||||
Subordinated Notes, | |||||||
6.95%, 03/15/2011 f | 975,904 | ||||||
2,100,000 | HSBC Holdings PLC | ||||||
Subordinated Notes, | |||||||
6.50%, 09/15/2037 f | 2,031,357 | ||||||
400,000 | HSBC USA | ||||||
Capital Trust I, | |||||||
7.808%, 12/15/2026 | |||||||
(Callable 09/08/2009) | |||||||
(Acquired 03/08/2007; | |||||||
Cost $411,644) * | 362,581 | ||||||
500,000 | HSBC USA Capital | ||||||
Trust II, | |||||||
8.38%, 05/15/2027 | |||||||
(Callable 09/08/2009) | |||||||
(Acquired 11/06/2007; | |||||||
Cost $517,111) * | 452,942 | ||||||
3,150,000 | Huntington National | ||||||
Bank Notes, | |||||||
8.00%, 04/01/2010 | 3,150,646 | ||||||
2,300,000 | ING Security Life | ||||||
Institutional Funding | |||||||
Senior Unsecured Notes, | |||||||
1.321%, 01/15/2010 | |||||||
(Acquired 04/27/2009; | |||||||
Cost $2,227,555) * | 2,302,482 | ||||||
Invesco Ltd. Notes: f | |||||||
1,015,000 | 5.375%, 02/27/2013 | 887,480 | |||||
921,000 | 5.375%, 12/15/2014 | 714,560 | |||||
900,000 | J.P. Morgan Chase & | ||||||
Company Notes, | |||||||
5.875%, 03/15/2035 | 720,000 | ||||||
1,255,000 | Jefferies Group Inc., | ||||||
6.25%, 01/15/2036 | 865,791 |
The accompanying notes are an integral part of these financial statements.
Page 54
Baird Aggregate Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 95.8% (cont.) | |||||||
Financial – 16.6% (cont.) | |||||||
$ | 1,250,000 | Kaupthing Bank, | |||||
5.75%, 10/04/2011 | |||||||
(Acquired 06/06/2008 | |||||||
and 07/22/2008; | |||||||
Cost $199,243 | |||||||
and $769,803, | |||||||
respectively) * f | $ | 162,500 | |||||
3,400,000 | Key Bank NA, | ||||||
7.413%, 05/06/2015 | 3,047,825 | ||||||
Lehman Brothers | |||||||
Holdings, Inc. Notes: @ | |||||||
750,000 | 8.50%, 08/01/2015 | 110,625 | |||||
1,425,000 | 6.50%, 07/19/2017 | 142 | |||||
2,500,000 | Liberty Mutual Group, | ||||||
10.75%, 06/15/2088 | |||||||
(Callable 06/15/2038) | |||||||
(Acquired 05/21/2008; | |||||||
Cost $2,445,125) * | 1,800,000 | ||||||
565,000 | Liberty Mutual | ||||||
Insurance Company, | |||||||
7.697%, 10/15/2097 | |||||||
(Acquired 03/26/2003; | |||||||
Cost $361,716) * | 338,002 | ||||||
1,125,000 | Lincoln National | ||||||
Corporation, | |||||||
6.05%, 04/20/2067 | |||||||
(Callable 04/20/2017) | 714,375 | ||||||
Marsh & McLennan | |||||||
Companies, Inc.: | |||||||
800,000 | 5.375%, 07/15/2014 | 778,806 | |||||
500,000 | 9.25%, 04/15/2019 | 562,659 | |||||
195,455 | Marshall & Ilsley Bank | ||||||
Notes, 2.90%, 08/18/2009 | 193,840 | ||||||
1,000,000 | Massachusetts Mutual | ||||||
Life Insurance Company, | |||||||
8.875%, 06/01/2039 | |||||||
(Acquired 05/27/2009; | |||||||
Cost $987,100) * | 1,061,892 | ||||||
800,000 | MBIA Insurance Corp., | ||||||
14.00%, 01/15/2033 | |||||||
(Callable 01/15/2013) | |||||||
(Acquired 01/11/2008; | |||||||
Cost $800,000) * | 304,000 | ||||||
Merrill Lynch | |||||||
& Company: | |||||||
1,000,000 | 6.40%, 08/28/2017 | 885,260 | |||||
1,750,000 | 6.875%, 04/25/2018 | 1,619,723 | |||||
1,275,000 | 7.75%, 05/14/2038 | 1,184,354 | |||||
422,000 | Metlife, Inc., | ||||||
6.50%, 12/15/2032 | 406,581 | ||||||
1,650,000 | Metropolitan Life | ||||||
Global Funding I, | |||||||
2.189%, 05/17/2010 | |||||||
(Acquired 12/31/2008 | |||||||
and 04/23/2009; Cost | |||||||
$1,479,042 and $95,768, | |||||||
respectively) * | 1,636,421 | ||||||
3,444,000 | The Mony Group, Inc., | ||||||
8.35%, 03/15/2010 | 3,557,642 | ||||||
2,000,000 | Morgan Stanley, | ||||||
5.625%, 01/09/2012 | 2,046,814 | ||||||
475,000 | Morgan Stanley | ||||||
Subordinated Notes, | |||||||
4.75%, 04/01/2014 | 448,680 | ||||||
510,000 | National Bank of Hungary | ||||||
Yankee Debentures, | |||||||
8.875%, 11/01/2013 f | 522,801 |
The accompanying notes are an integral part of these financial statements.
Page 55
Baird Aggregate Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 95.8% (cont.) | |||||||
Financial – 16.6% (cont.) | |||||||
$ | 1,250,000 | National City Bank | |||||
of Cleveland | |||||||
Subordinated Notes, | |||||||
4.625%, 05/01/2013 | $ | 1,193,090 | |||||
2,600,000 | National City Bank of | ||||||
Kentucky Subordinated | |||||||
Notes, 6.30%, 02/15/2011 | 2,631,234 | ||||||
1,750,000 | National Westminster | ||||||
Bank Subordinated Notes, | |||||||
7.375%, 10/01/2009 f | 1,730,916 | ||||||
2,000,000 | Nationwide Building | ||||||
Society, 4.25%, | |||||||
02/01/2010 (Acquired | |||||||
12/02/2008; Cost | |||||||
$1,970,004) * f | 1,994,734 | ||||||
4,921,000 | Navigators Group Inc. | ||||||
Senior Unsecured Notes, | |||||||
7.00%, 05/01/2016 | 3,826,127 | ||||||
4,334,000 | NB Capital Trust IV, | ||||||
8.25%, 04/15/2027 | |||||||
(Callable 09/08/2009) | 3,639,225 | ||||||
2,500,000 | North Fork Capital Trust II, | ||||||
8.00%, 12/15/2027 | |||||||
(Callable 09/08/2009) | 1,814,818 | ||||||
1,600,000 | Pricoa Global Funding I, | ||||||
2.066%, 06/04/2010 | |||||||
(Acquired 03/06/2009; | |||||||
Cost $1,483,827) * | 1,586,346 | ||||||
4,480,000 | Principal Financial | ||||||
Group (AU) Senior Notes, | |||||||
8.20%, 08/15/2009 | |||||||
(Acquired 3/10/2009; | |||||||
Cost $4,449,747) * f | 4,498,319 | ||||||
2,000,000 | Principal Life | ||||||
Income Funding, | |||||||
1.128%, 07/17/2009 | 1,999,308 | ||||||
4,750,000 | Regions Financing | ||||||
Trust II, | |||||||
6.625%, 05/15/2047 | 3,040,000 | ||||||
1,000,000 | Republic New York | ||||||
Capital I, | |||||||
7.75%, 11/15/2026 | 889,390 | ||||||
700,000 | Republic New York | ||||||
Corporation Debentures, | |||||||
9.125%, 05/15/2021 | 665,970 | ||||||
1,000,000 | Santander | ||||||
Financial Issuances, | |||||||
6.375%, 02/15/2011 f | 997,907 | ||||||
2,000,000 | Santander Perpetual, | ||||||
6.671%, 10/29/2049 | |||||||
(Callable 10/24/2017) f | 1,480,000 | ||||||
8,760,000 | Schwab Capital Trust I, | ||||||
7.50%, 11/15/2067 | |||||||
(Callable 11/15/2017) | 7,302,424 | ||||||
500,000 | SLM Corporation Notes, | ||||||
5.625%, 08/01/2033 | 307,839 | ||||||
Sovereign Bancorp, Inc.: | |||||||
1,500,000 | 3.44%, 03/23/2010 | 1,384,305 | |||||
800,000 | 4.80%, 09/01/2010 | 781,436 | |||||
745,000 | 4.90%, 09/23/2010 | 727,678 | |||||
1,500,000 | 8.75%, 05/30/2018 | 1,475,256 | |||||
3,000,000 | Sun Life Financial | ||||||
Global Funding, | |||||||
1.663%, 07/06/2010 | |||||||
(Acquired 03/25/2009; | |||||||
Cost $2,819,695) * | 2,911,542 |
The accompanying notes are an integral part of these financial statements.
Page 56
Baird Aggregate Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 95.8% (cont.) | |||||||
Financial – 16.6% (cont.) | |||||||
$ | 1,000,000 | Symetra Financial | |||||
Corporation Senior Notes, | |||||||
6.125%, 04/01/2016 | |||||||
(Acquired 03/23/2006; | |||||||
Cost $995,570) * | $ | 756,869 | |||||
2,400,000 | Toll Road Inv. | ||||||
Partnership II, | |||||||
0.00%, 02/15/2011 | |||||||
(Acquired 06/19/2008; | |||||||
Cost $2,118,833) * ^ | 2,156,251 | ||||||
1,000,000 | Travelers Companies, Inc., | ||||||
6.75%, 06/20/2036 | 1,084,062 | ||||||
560,000 | UFJ Finance Aruba AEC, | ||||||
6.75%, 07/15/2013 f | 579,848 | ||||||
301,000 | United Mexican | ||||||
States Notes, | |||||||
6.75%, 09/27/2034 f | 303,559 | ||||||
650,000 | Washington Mutual | ||||||
Preferred Funding Trust I, | |||||||
6.534%, 03/29/2049 | |||||||
(Callable 03/15/2011) | |||||||
(Acquired 07/31/2007; | |||||||
Cost $606,756) * @ | 8,125 | ||||||
2,788,000 | Westdeutsche Landesbank | ||||||
Subordinated Notes, | |||||||
4.796%, 07/15/2015 | 2,906,975 | ||||||
750,000 | Willis North America Inc., | ||||||
5.625%, 07/15/2015 | 658,227 | ||||||
163,651,634 | |||||||
Industrial – 12.7% | |||||||
Ameritech Capital | |||||||
Funding Debentures: | |||||||
2,236,691 | 9.10%, 06/01/2016 | 2,267,734 | |||||
1,500,000 | 6.45%, 01/15/2018 | 1,597,638 | |||||
2,000,000 | Anglo American Capital | ||||||
PLC, 9.375%, 04/08/2019 | |||||||
(Acquired 04/02/2009; | |||||||
Cost $2,000,000) * f | 2,160,000 | ||||||
2,765,000 | British Sky Broadcasting | ||||||
Group PLC, | |||||||
8.20%, 07/15/2009 f | 2,766,631 | ||||||
British Telecom | |||||||
PLC Notes: f | |||||||
2,575,000 | 8.625%, 12/15/2010 | 2,734,835 | |||||
600,000 | 9.125%, 12/15/2030 | 665,195 | |||||
600,000 | Bunge Limited Finance | ||||||
Corporation Notes, | |||||||
5.35%, 04/15/2014 | 583,795 | ||||||
3,000,000 | Bunge NA Finance LP | ||||||
5.90%, 04/01/2017 | 2,745,744 | ||||||
1,000,000 | Canadian National | ||||||
Resources, | |||||||
6.25%, 03/15/2038 f | 998,164 | ||||||
800,000 | Clear Channel | ||||||
Communications Senior | |||||||
Unsubordinated Notes, | |||||||
5.50%, 12/15/2016 | 174,000 | ||||||
680,000 | Comcast-Cable Holdings, | ||||||
7.875%, 08/01/2013 | 773,682 | ||||||
1,000,000 | Comcast Corporation, | ||||||
6.95%, 08/15/2037 | 1,042,679 | ||||||
825,000 | Comcast Holdings | ||||||
Corporation, | |||||||
10.625%, 07/15/2012 | 965,250 | ||||||
5,000,000 | Computer Sciences | ||||||
Corporation, | |||||||
7.375%, 06/15/2011 | 5,313,420 | ||||||
ConAgra Foods, Inc.: | |||||||
580,000 | 5.819%, 06/15/2017 | 585,880 | |||||
120,000 | 9.75%, 03/01/2021 | 145,760 |
The accompanying notes are an integral part of these financial statements.
Page 57
Baird Aggregate Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 95.8% (cont.) | |||||||
Industrial – 12.7% (cont.) | |||||||
Continental Airlines, Inc. | |||||||
Pass-Thru Certificates: | |||||||
$ | 83,497 | Series 2000-2, Class C, | |||||
8.312%, 10/02/2012 | $ | 65,127 | |||||
373,641 | Series 1997-4, | ||||||
6.90%, 01/02/2018 | 325,068 | ||||||
COX Communications Inc.: | |||||||
1,000,000 | 7.75%, 11/01/2010 | 1,040,996 | |||||
1,775,000 | 7.125%, 10/01/2012 | 1,908,047 | |||||
2,000,000 | 5.45%, 12/15/2014 | 1,985,374 | |||||
2,000,000 | CVS Caremark Corp., | ||||||
5.75%, 06/01/2017 | 2,010,336 | ||||||
1,000,000 | D.R. Horton Inc. | ||||||
Unsubordinated Notes, | |||||||
6.50%, 04/15/2016 | 855,000 | ||||||
300,000 | Deutsche Telekom | ||||||
International | |||||||
Finance BV, | |||||||
8.25%, 06/15/2030 f | 351,219 | ||||||
Donnelley (R.R.) | |||||||
& Sons Co.: | |||||||
3,900,000 | 4.95%, 05/15/2010 | 3,905,331 | |||||
1,500,000 | 6.125%, 01/15/2017 | 1,319,414 | |||||
635,000 | FedEx Corporation, | ||||||
9.65%, 06/15/2012 | 713,044 | ||||||
3,136,679 | FedEx Corporation | ||||||
Pass-Thru Certificates, | |||||||
Series 1998-1, 6.845%, | |||||||
01/15/2019 | 2,995,528 | ||||||
3,725,000 | Fiserv, Inc., | ||||||
6.125%, 11/20/2012 | 3,866,539 | ||||||
403,000 | Ford Motor | ||||||
Company Debentures, | |||||||
9.215%, 09/15/2021 | 233,740 | ||||||
2,200,000 | GTE Corporation | ||||||
Debentures, | |||||||
6.84%, 04/15/2018 | 2,290,743 | ||||||
3,500,000 | Health Care Service | ||||||
Corporation Notes, | |||||||
7.75%, 06/15/2011 | |||||||
(Acquired 06/20/2001, | |||||||
01/26/2005 and | |||||||
06/15/2009; Cost | |||||||
$199,106, $315,372 | |||||||
and $3,209,610, | |||||||
respectively) * | 3,663,569 | ||||||
650,000 | Health Management | ||||||
Association, | |||||||
6.125%, 04/15/2016 | 557,375 | ||||||
1,950,000 | Highmark, Inc. Notes, | ||||||
6.80%, 08/15/2013 | |||||||
(Acquired 08/14/2003, | |||||||
09/05/2007 and | |||||||
12/17/2007; Cost | |||||||
$274,373, $746,980 | |||||||
and $956,214, | |||||||
respectively) * | 1,805,394 | ||||||
2,000,000 | Humana Inc., | ||||||
7.20%, 06/15/2018 | 1,802,282 | ||||||
850,000 | Johnson Controls Inc., | ||||||
Senior Notes, | |||||||
6.00%, 01/15/2036 | 606,403 | ||||||
400,000 | Laboratory Corporation | ||||||
of America, | |||||||
5.625%, 12/15/2015 | 372,878 | ||||||
900,000 | Lafarge S.A. Notes, | ||||||
7.125%, 07/15/2036 f | 694,473 | ||||||
1,000,000 | Masco Corporation, | ||||||
6.125%, 10/03/2016 | 839,596 |
The accompanying notes are an integral part of these financial statements.
Page 58
Baird Aggregate Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 95.8% (cont.) | |||||||
Industrial – 12.7% (cont.) | |||||||
$ | 650,000 | McClatchy Company, | |||||
5.75%, 09/01/2017 | $ | 97,500 | |||||
1,100,000 | Nabors Industries, Inc., | ||||||
6.15%, 02/15/2018 | 1,055,957 | ||||||
1,050,000 | New Cingular Wireless | ||||||
Services, Inc. Senior | |||||||
Notes, 8.75%, 03/01/2031 | 1,279,750 | ||||||
1,500,000 | Nextel Communications, | ||||||
7.375%, 08/01/2015 | 1,196,250 | ||||||
320,000 | Pactiv Corporation, | ||||||
7.95%, 12/15/2025 | 300,119 | ||||||
400,000 | PCCW-HWT Capital II | ||||||
Ltd., 6.00%, 07/15/2013 | |||||||
(Acquired 07/10/2003; | |||||||
Cost $398,132) * f | 390,830 | ||||||
2,800,000 | Pemex Project Funding | ||||||
Master Trust, | |||||||
5.75%, 03/01/2018 | 2,576,000 | ||||||
4,095,000 | Plum Creek | ||||||
Timberlands, | |||||||
5.875%, 11/15/2015 | 3,461,573 | ||||||
4,975,000 | Premcor Refining Group, | ||||||
7.50%, 06/15/2015 | 5,161,697 | ||||||
Qwest Capital | |||||||
Funding, Inc.: | |||||||
300,000 | 7.00%, 08/03/2009 | 300,000 | |||||
200,000 | 7.25%, 02/15/2011 | 194,000 | |||||
500,000 | Rio Tinto Alcan Inc., | ||||||
5.75%, 06/01/2035 f | 362,563 | ||||||
3,700,000 | Rio Tinto Financial | ||||||
USA Ltd., 6.50%, | |||||||
07/15/2018 f | 3,702,157 | ||||||
1,500,000 | SK Telecom, | ||||||
6.625%, 07/20/2027 | |||||||
(Acquired 07/13/2007; | |||||||
Cost $1,482,015) * f | 1,386,174 | ||||||
Sprint Capital | |||||||
Corporation: | |||||||
2,800,000 | 6.90%, 05/01/2019 | 2,317,000 | |||||
358,000 | 8.75%, 03/15/2032 | 288,190 | |||||
1,000,000 | Target Corporation, | ||||||
6.50%, 10/15/2037 | 1,011,555 | ||||||
Telecom Italia | |||||||
Capital S.A.: f | |||||||
1,400,000 | 6.20%, 07/18/2011 | 1,449,276 | |||||
2,000,000 | 7.175%, 06/18/2019 | 2,027,390 | |||||
2,100,000 | 7.20%, 07/18/2036 | 2,036,118 | |||||
2,075,000 | Telefonica Emisones S.A., | ||||||
6.221%, 07/03/2017 f | 2,195,277 | ||||||
1,000,000 | Teva Pharmaceutical | ||||||
Finance LLC, | |||||||
5.55%, 02/01/2016 | 1,034,338 | ||||||
2,800,000 | Time Warner | ||||||
Cable, Inc., | |||||||
6.75%, 06/15/2039 | 2,725,215 | ||||||
Time Warner, Inc.: | |||||||
2,000,000 | 6.875%, 05/01/2012 | 2,139,490 | |||||
1,100,000 | 7.625%, 04/15/2031 | 1,069,372 | |||||
250,000 | 7.70%, 05/01/2032 | 245,666 | |||||
1,000,000 | 6.55%, 05/01/2037 | 958,855 | |||||
3,000,000 | Tyco Electronics | ||||||
Group S.A., | |||||||
6.55%, 10/01/2017 f | 2,723,778 | ||||||
Tyco International | |||||||
Finance: f | |||||||
1,775,000 | 6.375%, 10/15/2011 | 1,870,374 | |||||
300,000 | 6.00%, 11/15/2013 | 305,045 | |||||
United AirLines, Inc. | |||||||
Pass-Thru Certificates: | |||||||
27,938 | Series 2001-1, Class A-2, | ||||||
6.201%, 12/31/2049 | 27,658 | ||||||
269,803 | Series 2000-2, Class C, | ||||||
7.762%, 10/01/2105 | 231,356 |
The accompanying notes are an integral part of these financial statements.
Page 59
Baird Aggregate Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 95.8% (cont.) | |||||||
Industrial – 12.7% (cont.) | |||||||
$ | 471,011 | U.S. Airways | |||||
Pass-Thru Certificate, | |||||||
Series 1998-1, 6.85%, | |||||||
01/30/2018 # ** | $ | 323,537 | |||||
Vale Overseas Limited: f | |||||||
350,000 | 8.25%, 01/17/2034 | 393,649 | |||||
1,450,000 | 6.875%, 11/21/2036 | 1,376,782 | |||||
2,000,000 | Verizon Wireless, | ||||||
8.50%, 11/15/2018 | |||||||
(Acquired 11/18/2008; | |||||||
Cost $1,978,700) * | 2,390,186 | ||||||
2,250,000 | Viacom, Inc. | ||||||
Senior Notes, | |||||||
7.70%, 07/30/2010 | 2,316,690 | ||||||
1,875,000 | Vodafone Group PLC, | ||||||
6.15%, 02/27/2037 f | 1,844,721 | ||||||
Vulcan Materials: | |||||||
2,000,000 | 7.00%, 06/15/2018 | 1,928,072 | |||||
500,000 | 7.15%, 11/30/2037 | 422,700 | |||||
1,000,000 | Wal-Mart Stores, | ||||||
5.25%, 09/01/2035 | 953,484 | ||||||
100,000 | Westvaco Corporation, | ||||||
9.75%, 06/15/2020 | 103,599 | ||||||
4,014,000 | Weyerhaeuser Company, | ||||||
5.25%, 12/15/2009 | 4,034,391 | ||||||
3,600,000 | Woodside Finance Ltd., | ||||||
8.125%, 03/01/2014 | |||||||
(Acquired 02/24/2009; | |||||||
Cost $3,598,884) * f | 3,874,745 | ||||||
125,810,962 | |||||||
Mortgage Backed Securities – 35.0% | |||||||
Bank of America | |||||||
Alternative Loan Trust: | |||||||
457,827 | Series 2003-4, Class 2A1, | ||||||
5.00%, 06/25/2018 | 450,816 | ||||||
814,479 | Series 2003-11, | ||||||
Class 4A1, | |||||||
4.75%, 01/25/2019 | 785,718 | ||||||
527,664 | Series 2004-6, | ||||||
Class 4A1, | |||||||
5.00%, 07/25/2019 | 482,648 | ||||||
546,469 | Series 2004-11, | ||||||
Class 4A1, | |||||||
5.50%, 12/25/2019 | 528,196 | ||||||
857,861 | Series 2005-2, Class 4A1, | ||||||
5.50%, 03/25/2020 | 794,862 | ||||||
3,987,789 | Series 2005-4, Class 3A1, | ||||||
5.50%, 05/25/2020 | 3,429,063 | ||||||
3,049,758 | Series 2005-10, | ||||||
Class 5A1, | |||||||
5.25%, 11/25/2020 | 2,734,745 | ||||||
3,849,092 | Series 2007-1, Class 4A1, | ||||||
6.098%, 04/25/2022 | 2,534,386 | ||||||
1,555,433 | Series 2003-11, | ||||||
Class 2A1, | |||||||
6.00%, 01/25/2034 | 1,391,870 | ||||||
853,916 | Series 2005-2, | ||||||
Class 1CB2, | |||||||
5.50%, 03/25/2035 | 628,064 | ||||||
1,158,091 | Series 2005-9, | ||||||
Class 1CB3, | |||||||
5.50%, 10/25/2035 | 909,696 | ||||||
657,344 | Series 2005-11, | ||||||
Class 1CB4, | |||||||
5.50%, 12/25/2035 | 512,397 | ||||||
2,201,460 | Series 2006-5, Class CB7, | ||||||
6.00%, 06/25/2046 | 1,500,623 | ||||||
2,492,142 | Chase Commercial | ||||||
Mortgage Securities | |||||||
Corporation, Series | |||||||
1999-2, Class A2, | |||||||
7.198%, 01/15/2032 | 2,504,519 |
The accompanying notes are an integral part of these financial statements.
Page 60
Baird Aggregate Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 95.8% (cont.) | |||||||
Mortgage Backed Securities – 35.0% (cont.) | |||||||
Chase Mortgage | |||||||
Finance Corporation: | |||||||
$ | 1,229,772 | Series 2003-S13, | |||||
Class A11, | |||||||
5.50%, 11/25/2033 | $ | 1,225,791 | |||||
6,000,000 | Series 2006-A1, Class | ||||||
2A3, 6.00%, 09/25/2036 | 2,906,358 | ||||||
602,837 | Citicorp Mortgage | ||||||
Securities, Inc., | |||||||
Series 2004-3, Class A2, | |||||||
5.25%, 05/25/2034 | 605,725 | ||||||
1,352,340 | Citigroup Mortgage | ||||||
Loan Trust, Inc., | |||||||
Series 2005-9, Class 2A2, | |||||||
5.50%, 10/25/2035 | 1,010,771 | ||||||
Countrywide Alternative | |||||||
Loan Trust: | |||||||
1,270,689 | Series 2005-50CB, Class | ||||||
4A1, 5.00%, 11/25/2020 | 995,830 | ||||||
6,343,727 | Series 2006-7CB, Class | ||||||
3A1, 5.25%, 05/25/2021 | 4,418,802 | ||||||
1,325,845 | Series 2006-J5, | ||||||
Class 3A1, 6.132%, | |||||||
07/25/2021 | 1,045,346 | ||||||
1,622,943 | Series 2006-43CB, | ||||||
Class 2A1, 6.00%, | |||||||
02/25/2022 | 1,230,901 | ||||||
1,777,394 | Series 2002-11, Class A4, | ||||||
6.25%, 10/25/2032 | 1,740,001 | ||||||
3,000,000 | Series 2005-10CB, Class | ||||||
1A6, 5.50%, 05/25/2035 | 2,153,649 | ||||||
2,417,295 | Series 2005-34CB, Class | ||||||
1A6, 5.50%, 09/25/2035 | 2,017,553 | ||||||
3,038,680 | Series 2006-28CB, Class | ||||||
A17, 6.00%, 10/25/2036 | 2,034,771 | ||||||
568,813 | Countrywide Home | ||||||
Loans, Inc., | |||||||
Series 2003-39, | |||||||
Class A5, | |||||||
5.00%, 05/25/2012 | 573,120 | ||||||
1,239,251 | CS First Boston | ||||||
Mortgage Securities Corp., | |||||||
Series 2004-4, Class 2A5, | |||||||
5.50%, 06/25/2015 | 1,189,742 | ||||||
361,089 | Deutsche Mortgage | ||||||
Securities, Inc. | |||||||
Series 2004-4, Class 1A6, | |||||||
5.65%, 04/25/2034 | 317,812 | ||||||
1,966,242 | Deutsche Securities | ||||||
Inc. Mortgage, | |||||||
Series 2006-AR5, Class | |||||||
21A, 6.00%, 10/25/2021 | 1,097,990 | ||||||
782,501 | DLJ Commercial | ||||||
Mortgage Corporation, | |||||||
Series 1999-CG3, Class | |||||||
A1B, 7.34%, 10/10/2032 | 781,642 | ||||||
Federal Gold Loan | |||||||
Mortgage Corporation | |||||||
(FGLMC): | |||||||
136,589 | 6.50%, 07/01/2014 | 145,003 | |||||
1,143,181 | 6.00%, 06/01/2020 | 1,214,558 | |||||
590,543 | 5.50%, 11/01/2022 | 614,855 | |||||
692,419 | 5.00%, 06/01/2023 | 713,063 | |||||
530,161 | 5.50%, 07/01/2023 | 551,614 | |||||
1,370,643 | 6.50%, 06/01/2029 | 1,472,611 | |||||
5,480,071 | 5.50%, 01/01/2036 | 5,676,101 | |||||
3,607,848 | 6.00%, 12/01/2036 | 3,772,527 | |||||
5,235,342 | 5.50%, 04/01/2037 | 5,411,984 |
The accompanying notes are an integral part of these financial statements.
Page 61
Baird Aggregate Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 95.8% (cont.) | |||||||
Mortgage Backed Securities – 35.0% (cont.) | |||||||
Federal Home Loan | |||||||
Mortgage Corporation | |||||||
(FHLMC): | |||||||
$ | 881,640 | Series 3124, Class VP, | |||||
6.00%, 06/15/2014 | $ | 939,904 | |||||
402,013 | Series 2695, Class UA, | ||||||
5.50%, 09/15/2014 | 419,351 | ||||||
1,999,691 | Series R007, Class AC, | ||||||
5.875%, 05/15/2016 | 2,051,999 | ||||||
3,398,169 | Series R003, Class VA, | ||||||
5.50%, 08/15/2016 | 3,634,863 | ||||||
2,125,989 | Series 3097, Class MC, | ||||||
6.00%, 11/15/2016 | 2,255,781 | ||||||
465,348 | Series 2391, Class QR, | ||||||
5.50%, 12/15/2016 | 493,801 | ||||||
4,314,659 | Series R009, Class AJ, | ||||||
5.75%, 12/15/2018 | 4,465,434 | ||||||
134,970 | Series 206, Class E, | ||||||
0.00%, 07/15/2019 ^ | 126,786 | ||||||
1,575,675 | Series R010, Class AB, | ||||||
5.50%, 12/15/2019 | 1,621,551 | ||||||
82,600 | Series 141, Class D, | ||||||
5.00%, 05/15/2021 | 82,962 | ||||||
76,320 | Series 1074, Class I, | ||||||
6.75%, 05/15/2021 | 81,317 | ||||||
433,690 | Series 1081, Class K, | ||||||
7.00%, 05/15/2021 | 471,278 | ||||||
65,374 | Series 163, Class F, | ||||||
6.00%, 07/15/2021 | 70,342 | ||||||
132,707 | Series 188, Class H, | ||||||
7.00%, 09/15/2021 | 142,722 | ||||||
65,706 | Series 1286, Class A, | ||||||
6.00%, 05/15/2022 | 65,697 | ||||||
2,556,365 | Series 1694, Class PK, | ||||||
6.50%, 03/15/2024 | 2,736,167 | ||||||
19,219,392 | Series 2009-15, | ||||||
Class MA, | |||||||
4.00%, 03/25/2024 | 19,733,643 | ||||||
1,390,602 | Series 2664, Class LG, | ||||||
5.50%, 07/15/2028 | 1,424,626 | ||||||
2,891,682 | Series 2552, Class ND, | ||||||
5.50%, 10/15/2031 | 2,983,685 | ||||||
Federal National | |||||||
Mortgage Association | |||||||
(FNMA): | |||||||
1,622,232 | 5.00%, 02/01/2018 | 1,699,186 | |||||
2,081,182 | 5.00%, 12/01/2019 | 2,179,258 | |||||
1,432,560 | 5.50%, 01/01/2023 | 1,491,645 | |||||
2,052,453 | 5.50%, 07/01/2023 | 2,136,255 | |||||
4,283,464 | 5.00%, 11/01/2023 | 4,399,595 | |||||
2,303,126 | 6.00%, 03/01/2026 | 2,425,061 | |||||
5,470,559 | 6.00%, 05/01/2026 | 5,760,188 | |||||
6,879,250 | 5.00%, 05/01/2028 | 7,053,647 | |||||
507,347 | 6.00%, 03/01/2033 | 534,944 | |||||
438,220 | 5.00%, 11/01/2033 | 448,336 | |||||
2,006,669 | 5.50%, 04/01/2034 | 2,079,532 | |||||
1,712,461 | 5.50%, 09/01/2034 | 1,775,859 | |||||
695,216 | 6.00%, 11/01/2034 | 731,077 | |||||
4,367,585 | 5.50%, 02/01/2035 | 4,529,280 | |||||
11,601,784 | 5.50%, 02/01/2035 | 12,031,300 | |||||
6,824,366 | 5.00%, 07/01/2035 | 6,976,582 | |||||
6,128,551 | 5.00%, 11/01/2035 | 6,261,416 | |||||
7,192,267 | 5.00%, 02/01/2036 | 7,348,193 | |||||
20,294,174 | 5.00%, 03/01/2036 | 20,734,145 | |||||
41,839,475 | 5.50%, 04/01/2036 | 43,349,210 | |||||
7,197,254 | 5.50%, 11/01/2036 | 7,444,589 | |||||
1,749,824 | 6.00%, 08/01/2037 | 1,825,866 | |||||
4,155,795 | Series 2006-B2, Class AB, | ||||||
5.50%, 05/25/2014 | 4,318,483 | ||||||
411,477 | Series 2003-27, Class OJ, | ||||||
5.00%, 07/25/2015 | 416,883 |
The accompanying notes are an integral part of these financial statements.
Page 62
Baird Aggregate Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 95.8% (cont.) | |||||||
Mortgage Backed Securities – 35.0% (cont.) | |||||||
$ | 337,271 | Series 2003-24, | |||||
Class PC, | |||||||
5.00%, 11/25/2015 | $ | 343,514 | |||||
63,922 | Series 2002-56, | ||||||
Class MC, | |||||||
5.50%, 09/25/2017 | 67,754 | ||||||
370,072 | Series 1989-37, Class G, | ||||||
8.00%, 07/25/2019 | 412,721 | ||||||
64,789 | Series 1989-94, Class G, | ||||||
7.50%, 12/25/2019 | 71,135 | ||||||
17,907 | Series 1990-58, Class J, | ||||||
7.00%, 05/25/2020 | 19,413 | ||||||
171,659 | Series 1990-76, Class G, | ||||||
7.00%, 07/25/2020 | 186,250 | ||||||
73,198 | Series 1990-105, Class J, | ||||||
6.50%, 09/25/2020 | 79,557 | ||||||
27,688 | Series 1990-108, Class G, | ||||||
7.00%, 09/25/2020 | 29,548 | ||||||
51,316 | Series 1991-1, Class G, | ||||||
7.00%, 01/25/2021 | 55,762 | ||||||
58,514 | Series 1991-86, Class Z, | ||||||
6.50%, 07/25/2021 | 62,953 | ||||||
205,462 | Series 2003-28, Class KA, | ||||||
4.25%, 03/25/2022 | 211,070 | ||||||
26,911 | Series G92-30, Class Z, | ||||||
7.00%, 06/25/2022 | 28,961 | ||||||
2,362,707 | Series 2003-33, Class LD, | ||||||
4.25%, 09/25/2022 | 2,436,185 | ||||||
723,842 | Series 1993-58, Class H, | ||||||
5.50%, 04/25/2023 | 774,487 | ||||||
472,264 | Series 1998-66, Class C, | ||||||
6.00%, 12/25/2028 | 507,235 | ||||||
1,788,484 | Series 2002-85, | ||||||
Class PD, 5.50%, | |||||||
05/25/2031 | 1,842,945 | ||||||
71,214 | Series 2003-44, | ||||||
Class AB, | |||||||
3.75%, 05/25/2033 | 70,880 | ||||||
2,459,454 | Series 2004-W6, Class | ||||||
1A4, 5.50%, 07/25/2034 | 2,302,565 | ||||||
4,493,553 | Series 2004-W6, Class | ||||||
1A6, 5.50%, 07/25/2034 | 4,694,358 | ||||||
6,391,070 | Series 2004-W10, Class | ||||||
A24, 5.00%, 08/25/2034 | 6,334,949 | ||||||
4,000,000 | Series 2004-W10, Class | ||||||
A4, 5.75%, 08/25/2034 | 3,753,916 | ||||||
First Horizon Alternative | |||||||
Mortgage Securities: | |||||||
965,478 | Series 2005-FA7, Class | ||||||
2A1, 5.00%, 09/25/2020 | 757,599 | ||||||
1,342,086 | Series 2006-FA6, Class | ||||||
3A1, 5.75%, 11/25/2021 | 1,084,993 | ||||||
3,495,491 | Series 2006-FA8, Class | ||||||
2A1, 5.75%, 02/25/2037 | 1,955,137 | ||||||
2,950,000 | First Union National | ||||||
Bank Commercial | |||||||
Mortgage Securities Inc., | |||||||
Series 2001-C4, Class A2, | |||||||
6.223%, 12/12/2033 | 3,033,491 | ||||||
GE Capital Commercial | |||||||
Mortgage Corporation: | |||||||
6,226,100 | Series 2000-1, Class A2, | ||||||
6.496%, 01/15/2033 | 6,287,459 | ||||||
2,865,000 | Series 2002-3A, Class AZ, | ||||||
4.996%, 12/10/2037 | 2,795,364 | ||||||
6,200,000 | Series 2004-C3, Class A4, | ||||||
5.189%, 07/10/2039 | 5,530,027 | ||||||
10,100,000 | GMAC Commercial | ||||||
Mortgage Securities, Inc., | |||||||
Series 2003-C1, | |||||||
Class A2, 4.079%, | |||||||
05/10/2036 | 9,411,960 |
The accompanying notes are an integral part of these financial statements.
Page 63
Baird Aggregate Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 95.8% (cont.) | |||||||
Mortgage Backed Securities – 35.0% (cont.) | |||||||
Government National | |||||||
Mortgage Association | |||||||
(GNMA): | |||||||
$ | 413,841 | 6.00%, 11/20/2033 | $ | 431,246 | |||
800,000 | Series 2004-78, Class C, | ||||||
4.658%, 04/16/2029 | 827,890 | ||||||
1,285,000 | Series 2004-100, Class B, | ||||||
4.603%, 02/16/2043 | 1,320,298 | ||||||
1,268,402 | J.P. Morgan Alternative | ||||||
Loan Trust, Series | |||||||
2006-A1, Class 2A1, | |||||||
5.799%, 03/25/2036 | 716,467 | ||||||
J.P. Morgan | |||||||
Mortgage Trust: | |||||||
3,100,000 | Series 2006-A7, | ||||||
Class 2A4R, 5.457%, | |||||||
01/25/2037 | 1,637,899 | ||||||
1,666,009 | Series 2006-A7, | ||||||
Class 2A2, 5.83%, | |||||||
01/25/2037 | 1,173,384 | ||||||
6,100,000 | Series 2007-A2, | ||||||
Class 2A3, 5.715%, | |||||||
04/25/2037 | 3,405,033 | ||||||
Master Alternative | |||||||
Loans Trust: | |||||||
2,724,480 | Series 2004-1, Class 1A1, | ||||||
5.00%, 01/25/2019 | 2,410,314 | ||||||
1,994,715 | Series 2004-4, Class 4A1, | ||||||
5.00%, 04/25/2019 | 1,864,435 | ||||||
815,435 | Series 2003-5, Class 6A1, | ||||||
6.00%, 08/25/2033 | 688,915 | ||||||
605,836 | Residential Accredit | ||||||
Loans, Inc., Series | |||||||
2004-QS6, Class A1, | |||||||
5.00%, 05/25/2019 | 554,151 | ||||||
800,000 | Residential Funding | ||||||
Mortgage Security I, | |||||||
Series 2003-S11, | |||||||
Class A2, 4.00%, | |||||||
06/25/2018 | 774,013 | ||||||
Salomon Brothers | |||||||
Mortgage Securities VII: | |||||||
3,783,649 | Series 2000-C1, Class A2, | ||||||
7.52%, 12/18/2009 | 3,806,831 | ||||||
3,462,014 | Series 2001-C2, Class A3, | ||||||
6.50%, 10/13/2011 | 3,553,224 | ||||||
1,163,962 | Series 2003-UP2, | ||||||
Class A2, 4.00%, | |||||||
06/25/2033 | 1,143,785 | ||||||
2,050,000 | Wachovia Bank | ||||||
Commercial Mortgage | |||||||
Trust, Series 2003-C3, | |||||||
Class A2, 4.867%, | |||||||
02/15/2035 | 1,903,007 | ||||||
Washington Mutual, Inc. | |||||||
Pass-Thru Certificates: | |||||||
2,122,063 | Series 2004-CB1, Class | ||||||
5A, 5.00%, 06/25/2019 | 2,089,569 | ||||||
3,734,704 | Series 2004-CB2, Class | ||||||
7A, 5.50%, 08/25/2019 | 3,535,130 | ||||||
1,335,702 | Series 2004-CB3, Class | ||||||
4A, 6.00%, 10/25/2019 | 1,213,402 | ||||||
828,684 | Series 2004-CB4, | ||||||
Class 21A, 5.50%, | |||||||
12/25/2019 | 738,501 | ||||||
344,787,844 | |||||||
Taxable Municipal Bonds – 0.8% | |||||||
1,000,000 | Cuyahoga County | ||||||
Ohio Industrial | |||||||
Development Revenue, | |||||||
9.125%, 10/01/2023 | 1,064,570 |
The accompanying notes are an integral part of these financial statements.
Page 64
Baird Aggregate Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 95.8% (cont.) | |||||||
Taxable Municipal Bonds – 0.8% (cont.) | |||||||
$ | 8,290,000 | Tobacco Settlement | |||||
Authority Iowa, | |||||||
6.50%, 06/01/2023 | $ | 6,201,335 | |||||
615,529 | Tobacco Settlement | ||||||
Financing Corporation, | |||||||
Series 2001-A, Class A, | |||||||
6.36%, 05/15/2025 | 566,822 | ||||||
7,832,727 | |||||||
Utilities – 5.7% | |||||||
850,000 | Arizona Pubic Service | ||||||
Senior Unsecured Notes, | |||||||
8.75%, 03/01/2019 | 926,741 | ||||||
599,000 | Beaver Valley Funding | ||||||
Corporation Debentures, | |||||||
9.00%, 06/01/2017 | 591,231 | ||||||
3,657,000 | Constellation Energy | ||||||
Group Inc. Senior | |||||||
Unsecured Notes, | |||||||
6.125%, 09/01/2009 | 3,672,765 | ||||||
1,900,000 | Enel Finance International, | ||||||
6.80%, 09/15/2037 | |||||||
(Acquired 09/13/2007; | |||||||
Cost $1,894,965) * f | 1,969,730 | ||||||
750,000 | Energy Transfer Partners, | ||||||
5.65%, 08/01/2012 | 764,825 | ||||||
Exelon Corporation | |||||||
Senior Notes: | |||||||
3,600,000 | 4.45%, 06/15/2010 | 3,635,640 | |||||
300,000 | 6.75%, 05/01/2011 | 313,130 | |||||
2,500,000 | FPL Group Capital, Inc., | ||||||
7.30%, 09/01/2067 | |||||||
(Callable 09/01/2017) | 2,125,000 | ||||||
705,344 | GG1C Funding | ||||||
Corporation, | |||||||
5.129%, 01/15/2014 | |||||||
(Acquired 06/27/2006; | |||||||
Cost $683,307) * | 649,163 | ||||||
Kinder Morgan Energy | |||||||
Partners Senior Notes: | |||||||
1,000,000 | 9.00%, 02/01/2019 | 1,137,385 | |||||
2,250,000 | 6.95%, 01/15/2038 | 2,179,555 | |||||
900,000 | Kinder Morgan Finance, | ||||||
5.70%, 01/05/2016 f | 771,750 | ||||||
172,383 | Kiowa Power Partners LLC, | ||||||
4.811%, 12/30/2013 | |||||||
(Acquired 11/19/2004; | |||||||
Cost $172,383) * | 158,840 | ||||||
Korea Electric Power | |||||||
Corporation: f | |||||||
100,000 | 7.75%, 04/01/2013 | 105,329 | |||||
2,165,000 | 6.75%, 08/01/2027 | 1,645,703 | |||||
1,325,000 | National Grid PLC | ||||||
Senior Unsecured Notes, | |||||||
6.30%, 08/01/2016 f | 1,361,285 | ||||||
1,500,000 | National Rural | ||||||
Utilities Coop, | |||||||
10.375%, 11/01/2018 | 1,880,735 | ||||||
NiSource Finance | |||||||
Corporation: | |||||||
2,875,000 | 7.875%, 11/15/2010 | 2,969,556 | |||||
2,948,000 | 6.15%, 03/01/2013 | 2,930,398 | |||||
625,000 | ONEOK, Inc. | ||||||
Senior Notes, | |||||||
7.125%, 04/15/2011 | 658,961 | ||||||
1,000,000 | Plains All American | ||||||
Pipeline Senior Notes, | |||||||
5.625%, 12/15/2013 | 990,884 |
The accompanying notes are an integral part of these financial statements.
Page 65
Baird Aggregate Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | ||||||||
Amount | Value | |||||||
LONG-TERM INVESTMENTS – 95.8% (cont.) | ||||||||
Utilities – 5.7% (cont.) | ||||||||
$ | 300,000 | PPL Energy Supply, | ||||||
LLC Senior Notes, | ||||||||
6.40%, 11/01/2011 | $ | 315,974 | ||||||
175,000 | PSE&G Energy | |||||||
Holdings LLC | ||||||||
Senior Notes, | ||||||||
8.50%, 06/15/2011 | 176,683 | |||||||
PSE&G Power LLC: | ||||||||
2,250,000 | 7.75%, 04/15/2011 | 2,408,137 | ||||||
350,000 | 5.00%, 04/01/2014 | 352,790 | ||||||
1,564,583 | RGS (I&M) Funding | |||||||
Corporation Debentures, | ||||||||
9.82%, 12/07/2022 | 1,712,076 | |||||||
3,900,000 | Rockies Express Pipeline | |||||||
LLC, 5.776%, 08/20/2009 | ||||||||
(Acquired 09/17/2007, | ||||||||
02/21/2008 and | ||||||||
02/25/2009; Cost | ||||||||
$2,199,441, $698,062 | ||||||||
and $997,352, | ||||||||
respectively) * | 3,900,371 | |||||||
1,400,000 | Southern Natural Gas, | |||||||
5.90%, 04/01/2017 | ||||||||
(Acquired 03/14/2007; | ||||||||
Cost $1,397,676) * | 1,355,908 | |||||||
3,500,000 | Spectra Energy Capital, | |||||||
5.668%, 08/15/2014 | 3,534,164 | |||||||
1,000,000 | Talisman Energy Inc., | |||||||
7.75%, 06/01/2019 f | 1,107,794 | |||||||
2,000,000 | Trans-Canada Pipelines, | |||||||
6.50%, 08/15/2018 f | 2,175,856 | |||||||
2,200,000 | Transcontinental Gas | |||||||
Pipe Line Corporation | ||||||||
Senior Notes, | ||||||||
8.875%, 07/15/2012 | 2,418,926 | |||||||
Vectren Utility | ||||||||
Holdings: | ||||||||
875,000 | 6.625%, 12/01/2011 | 917,440 | ||||||
1,100,000 | 5.25%, 08/01/2013 | 1,113,684 | ||||||
Williams Companies, | ||||||||
Inc. Notes: | ||||||||
2,475,000 | 6.375%, 10/01/2010 | |||||||
(Acquired 07/09/2008; | ||||||||
Cost $2,489,559) * | 2,474,517 | |||||||
550,000 | 8.125%, 03/15/2012 | 569,993 | ||||||
55,972,919 | ||||||||
U.S. Government Agency Issues – 3.9% | ||||||||
38,775,000 | Federal National Mortgage | |||||||
Association (FNMA), | ||||||||
2.75%, 03/13/2014 | 38,692,022 | |||||||
U.S. Treasury Obligations – 15.8% | ||||||||
U.S. Treasury Bonds: | ||||||||
34,750,000 | 2.25%, 05/31/2014 | 34,283,064 | ||||||
99,475,000 | 6.25%, 08/15/2023 | 121,172,985 | ||||||
155,456,049 | ||||||||
Total Long-Term | ||||||||
Investments | ||||||||
(Cost $1,002,673,266) | 944,782,652 | |||||||
Shares | ||||||||
SHORT-TERM INVESTMENTS – 6.4% | ||||||||
Money Market Funds – 6.4% | ||||||||
63,266,080 | Short-Term Investment | |||||||
Company Liquid Assets | ||||||||
Portfolio – AIM Fund | 63,266,080 | |||||||
Total Short-Term | ||||||||
Investments | ||||||||
(Cost $63,266,080) | 63,266,080 |
The accompanying notes are an integral part of these financial statements.
Page 66
Baird Aggregate Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
INVESTMENTS PURCHASED | |||||||
WITH CASH PROCEEDS FROM | |||||||
SECURITIES LENDING – 27.2% | |||||||
Commercial Paper – 0.5% | |||||||
$ | 4,516,706 | Atlantic East | |||||
Funding LLC, | |||||||
3.059%, 03/25/10 # ** | $ | 4,516,706 | |||||
4,516,706 | |||||||
Corporate Bond – 0.4% | |||||||
4,381,863 | Svenska Handelsbanken, | ||||||
4.418%, 08/06/09 f | 4,381,863 | ||||||
4,381,863 | |||||||
Shares | |||||||
Investment Companies – 26.3% | |||||||
258,020,640 | Mount Vernon | ||||||
Securities Lending | |||||||
Trust Prime Portfolio | $ | 258,020,640 | |||||
1,610,037 | Reserve | ||||||
Primary Fund # ** | 1,610,037 | ||||||
259,630,677 | |||||||
Total Investments | |||||||
Purchased With Cash | |||||||
Proceeds From | |||||||
Securities Lending | |||||||
(Cost $268,529,246) | 268,529,246 | ||||||
Total Investments | |||||||
(Cost $1,334,468,592) – | |||||||
129.4% | 1,276,577,978 | ||||||
Liabilities in Excess of | |||||||
Other Assets – (29.4)% | (290,259,930 | ) | |||||
TOTAL NET | |||||||
ASSETS – 100.0% | $ | 986,318,048 |
^ | Non Income Producing |
* | Restricted Security Deemed Liquid |
** | Illiquid Security |
f | Foreign Security |
# | Priced at Fair Value by the Valuation Committee as delegated by the Baird Funds’ Board of Directors |
@ | Security in Default |
The accompanying notes are an integral part of these financial statements.
Page 67
Baird Aggregate Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
SFAS 157 – Summary of Fair Value Exposure at June 30, 2009
As adopted by the Fund, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“SFAS 157”) defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. Under SFAS 157, various inputs are used in determining the value of the Fund’s investments. These inputs are summarized into three broad levels and described below:
Level 1 – | Quoted prices in active markets for identical securities. |
Level 2 – | Other significant observable inputs (including quoted prices for similar securities, quoted prices for identical securities in inactive markets, dealer indications, interest rates, yield curves, benchmark yields, issuer spreads, prepayment speeds, cash flows, credit risk, default rates, information about issuers, sectors and markets, inputs corroborated by observable market data, etc.) |
Level 3 – | Significant unobservable inputs (including the Fund’s own assumptions about the assumptions that market participants would use in pricing the security) |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Fund’s net assets as of June 30, 2009:
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Fixed Income | ||||||||||||||||
Asset Backed Securities | $ | — | $ | 51,278,495 | $ | 1,300,000 | $ | 52,578,495 | ||||||||
Corporate Debt Securities | — | 345,111,978 | 323,537 | 345,435,515 | ||||||||||||
Mortgage Backed Securities | — | 344,787,844 | — | 344,787,844 | ||||||||||||
Taxable Municipal Bonds | — | 7,832,727 | — | 7,832,727 | ||||||||||||
U.S. Government Agency Issues | — | 38,692,022 | — | 38,692,022 | ||||||||||||
U.S. Treasury Obligations | — | 155,456,049 | — | 155,456,049 | ||||||||||||
Total Fixed Income | — | 943,159,115 | 1,623,537 | 944,782,652 | ||||||||||||
Short-Term Investments | ||||||||||||||||
Money Market Mutual Funds | 63,266,080 | — | — | 63,266,080 | ||||||||||||
Total Short-Term Investments | 63,266,080 | — | — | 63,266,080 | ||||||||||||
Investments Purchased With Cash | ||||||||||||||||
Proceeds From Securities Lending | ||||||||||||||||
Commercial Paper | — | 4,516,706 | — | 4,516,706 | ||||||||||||
Corporate Bonds | — | 4,381,863 | — | 4,381,863 | ||||||||||||
Money Market Mutual Funds | 258,020,640 | — | 1,610,037 | 259,630,677 | ||||||||||||
Total Investments Purchased With Cash | ||||||||||||||||
Proceeds From Securities Lending | 258,020,640 | 8,898,569 | 1,610,037 | 268,529,246 | ||||||||||||
Total Investments in Securities | $ | 321,286,720 | $ | 952,057,684 | $ | 3,233,574 | $ | 1,276,577,978 |
Page 68
Baird Aggregate Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Level 3 Reconciliation Disclosure
Following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value.
Description | Investments in Securities | |||
Balance as of December 31, 2008 | $ | 4,580,447 | ||
Accrued discounts/premiums | — | |||
Realized gain (loss) | — | |||
Change in unrealized appreciation (depreciation) | 912,590 | |||
Net purchases (sales/paydowns) | (1,803,026 | ) | ||
Transfers in and/or out of Level 3 * | (456,437 | ) | ||
Balance as of June 30, 2009 | $ | 3,233,574 | ||
Change in unrealized appreciation (depreciation) during | ||||
the year for level 3 investments held at June 30, 2009. | 912,590 |
* | The information used in the above reconciliation represents fiscal year to date activity for any investments identified as using Level 3 inputs at either the beginning or end of the current fiscal period. Transfers in or out of Level 3 represents either the beginning value (for transfers in) or ending value (for transfers out) of any security or instrument where a change in the pricing level occurred from the beginning to the end of the period. |
Page 69
Baird Core Plus Bond Fund
The Baird Core Plus Bond Fund seeks an annual rate of total return, before Fund expenses, greater than the annual rate of total return of the Barclays Capital U.S. Universal Bond Index. The Barclays Capital U.S. Universal Bond Index is an unmanaged, market value weighted index of fixed income securities issued in U.S. dollars, including U.S. government and investment grade debt, non-investment grade debt, asset-backed and mortgage-backed securities, Eurobonds, 144A securities and emerging market debt, with maturities of at least one year.
Portfolio Characteristics
Quality Distribution* | Sector Weightings* |
Net Assets: | $214,069,770 | Annualized Expense Ratio: | ||||
SEC 30-Day Yield:** | Institutional Class: | 0.30 | % | |||
Institutional Class: | 6.85% | Investor Class: | 0.55 | %*** | ||
Investor Class: | 6.58% | Portfolio Turnover Rate: | 22.9 | %# | ||
Average Effective Duration: | 4.32 years | Total Number of Holdings: | 338 | |||
Average Effective Maturity: | 6.28 years |
* | Percentages shown are based on the Fund’s total net assets. |
** | SEC yields are based on SEC guidelines and are calculated for the 30 days ended June 30, 2009. |
*** | Includes 0.25% 12b-1 fee. |
# | Not annualized. |
Page 70
Baird Core Plus Bond Fund
Average Annual Total Returns
Since | |||
For the Periods Ended June 30, 2009 | One Year | Five Years | Inception(1) |
Institutional Class Shares | 3.66% | 4.89% | 6.12% |
Investor Class Shares | 3.41% | 4.64% | 5.86% |
Barclays Capital U.S. Universal Bond Index(2) | 4.93% | 4.95% | 5.98% |
(1) | For the period from September 29, 2000 (commencement of operations) through June 30, 2009. |
(2) | The Barclays Capital U.S. Universal Bond Index is an unmanaged, market value weighted index of fixed income securities issued in U.S. dollars, including U.S. government and investment grade debt, non-investment grade debt, asset-backed and mortgage-backed securities, Eurobonds, 144A securities and emerging market debt, with maturities of at least one year. This index does not reflect any deduction for fees, expenses or taxes. A direct investment in an index is not possible. |
The returns shown in the table above reflect reinvestment of dividends and/or capital gains distributions in additional shares. The returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Past performance does not guarantee future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.
For information about the performance of the Fund as of the most recent month-end, please call 1-866-44BAIRD or visit www.bairdfunds.com. Mutual fund performance changes over time and current performance may be lower or higher than that stated.
Page 71
Baird Core Plus Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 97.3% | |||||||
Asset Backed Securities – 7.3% | |||||||
$ | 1,825,000 | American Express Credit | |||||
Account Master Trust, | |||||||
Series 2005-5, Class A, | |||||||
4.276%, 02/15/2013 | $ | 1,809,227 | |||||
109,232 | Amresco Residential | ||||||
Securities Mortgage | |||||||
Loan Trust, | |||||||
Series 1998-2, Class A6, | |||||||
6.45%, 12/25/2027 | 94,572 | ||||||
600,000 | Bayview Financial | ||||||
Acquisition Trust, | |||||||
Series 2007-A, | |||||||
6.205%, 05/28/2037 | 369,452 | ||||||
Capital One Multi-Asset | |||||||
Execution Trust: | |||||||
175,000 | Series 2006-9A, Class A9, | ||||||
5.415%, 05/15/2013 | 173,005 | ||||||
275,000 | Series 2003-A5, Class A5, | ||||||
0.610%, 07/15/2013 | 272,222 | ||||||
350,000 | Chase Issuance Trust, | ||||||
Series 2007-A15, Class A, | |||||||
4.96%, 09/17/2012 | 362,331 | ||||||
56,518 | CitiFinancial Mortgage | ||||||
Securities, Inc., | |||||||
Series 2004-1, Class AF2, | |||||||
2.645%, 04/25/2034 | 53,311 | ||||||
Countrywide Asset-Backed | |||||||
Certificates: | |||||||
195,357 | Series 2006-S2, Class A2, | ||||||
5.627%, 07/25/2027 | 137,670 | ||||||
1,483,070 | Series 2006-S7, Class A2, | ||||||
5.571%, 11/25/2035 | 340,001 | ||||||
583,930 | Series 2005-10, Class AF6, | ||||||
4.915%, 02/25/2036 | 316,520 | ||||||
56,587 | Series 2005-13, Class AF2, | ||||||
5.294%, 04/25/2036 | 55,493 | ||||||
1,000,000 | Series 2005-13, | ||||||
Class AF3, 5.43%, | |||||||
04/25/2036 | 665,844 | ||||||
356,153 | Series 2006-S9, Class A3, | ||||||
5.728%, 08/25/2036 | 131,415 | ||||||
1,000,000 | Series 2006-13, | ||||||
Class 1AF2, 5.884%, | |||||||
01/25/2037 | 792,285 | ||||||
1,300,000 | Series 2006-10, | ||||||
Class 1AF3, 5.971%, | |||||||
09/25/2046 | 631,442 | ||||||
616,000 | Series 2006-9, Class 1AF3, | ||||||
5.859%, 10/25/2046 | �� | 189,993 | |||||
812,773 | Credit-Based Asset | ||||||
Servicing and Security, | |||||||
Series 2005-CB3, | |||||||
4.725%, 02/25/2033 | 730,599 | ||||||
Discover Card Master | |||||||
Trust I: | |||||||
1,075,000 | Series 2005-2, Class A, | ||||||
4.266%, 04/17/2012 | 1,073,187 | ||||||
650,000 | Series 2003-3, Class A, | ||||||
2.66%, 09/15/2012 | 646,702 | ||||||
8,560 | GE Capital Mortgage | ||||||
Services, Inc., | |||||||
Series 1999-HE1, Class | |||||||
A7, 6.265%, 04/25/2029 | 7,604 | ||||||
431,442 | GMAC Mortgage | ||||||
Corporation Loan Trust, | |||||||
Series 2005-HE3, Class | |||||||
A2, 3.526%, 02/25/2036 | 140,220 | ||||||
Green Tree Financial | |||||||
Corporation: | |||||||
77,088 | Series 1993-4, Class A5, | ||||||
7.05%, 01/15/2019 | 71,679 | ||||||
24,973 | Series 1997-1, Class A5, | ||||||
6.86%, 03/15/2028 | 23,445 |
The accompanying notes are an integral part of these financial statements.
Page 72
Baird Core Plus Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 97.3% (cont.) | |||||||
Asset Backed Securities – 7.3% (cont.) | |||||||
$ | 77,055 | Series 1997-4, Class A5, | |||||
6.88%, 02/15/2029 | $ | 69,148 | |||||
1,075,054 | Series 1997-5, Class A6, | ||||||
6.82%, 05/15/2029 | 1,001,261 | ||||||
878,638 | Series 1998-3, Class A5, | ||||||
6.22%, 03/01/2030 | 704,895 | ||||||
367,759 | Series 1998-4, Class A5, | ||||||
6.18%, 04/01/2030 | 296,337 | ||||||
MBNA Master | |||||||
Credit Card Trust: | |||||||
375,000 | Series 2000-E, Class A, | ||||||
7.80%, 10/15/2012 | 394,338 | ||||||
250,000 | Series 2002-A3, Class A3, | ||||||
0.559%, 09/15/2014 | 241,040 | ||||||
52,892 | Oakwood Mortgage | ||||||
Investors, Inc., | |||||||
Series 1999-B, Class A3, | |||||||
6.45%, 11/15/2017 | 32,265 | ||||||
Renaissance Home | |||||||
Equity Loan Trust: | |||||||
271,911 | Series 2005-1, Class AF6, | ||||||
4.97%, 05/25/2035 | 200,064 | ||||||
819,000 | Series 2006-2, Class AF3, | ||||||
5.797%, 08/25/2036 | 589,702 | ||||||
769,250 | Series 2006-3, Class AF2, | ||||||
5.58%, 11/25/2036 | 650,629 | ||||||
500,000 | Series 2007-1, Class AF2, | ||||||
5.512%, 04/25/2037 | 200,689 | ||||||
1,500,000 | Series 2007-2, Class AF2, | ||||||
5.675%, 06/25/2037 | 665,224 | ||||||
242,889 | Residential Asset | ||||||
Mortgage Products, Inc., | |||||||
Series 2003-RS10, Class | |||||||
AI7, 4.85%, 11/25/2033 | 185,416 | ||||||
330,255 | Residential Asset | ||||||
Securities Corporation, | |||||||
Series 2003-KS5, Class | |||||||
AI6, 3.62%, 07/25/2033 | 183,781 | ||||||
400,000 | Stingray Pass-Thru | ||||||
Certificates, Series 2005, | |||||||
5.902%, 01/12/2015 | |||||||
(Acquired 05/10/2007, | |||||||
Cost $384,611) # ** | 200,000 | ||||||
1,786,880 | Structured Asset Securities | ||||||
Corporation, Series | |||||||
2005-7XS, Class 1A4B, | |||||||
5.44%, 04/25/2035 | 1,015,212 | ||||||
15,718,220 | |||||||
Financial – 20.1% | |||||||
825,000 | American Express Credit | ||||||
Corporation, Series C, | |||||||
7.30%, 08/20/2013 | 857,760 | ||||||
1,000,000 | American General Finance, | ||||||
6.90%, 12/15/2017 | 541,482 | ||||||
150,000 | AmSouth Bancorporation | ||||||
Subordinated Debentures, | |||||||
6.75%, 11/01/2025 | 101,916 | ||||||
155,000 | Associates Corporation | ||||||
North America | |||||||
Subordinated Debentures, | |||||||
8.15%, 08/01/2009 | 155,111 | ||||||
500,000 | Bancwest Corporation, | ||||||
8.30%, 01/15/2011 | 515,938 | ||||||
300,000 | Bank of America | ||||||
Corporation Subordinated | |||||||
Notes, 10.20%, 07/15/2015 | 313,753 | ||||||
150,000 | Bank Tokyo – | ||||||
Mitsubishi UFJ Ltd., | |||||||
7.40%, 06/15/2011 f | 154,341 |
The accompanying notes are an integral part of these financial statements.
Page 73
Baird Core Plus Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 97.3% (cont.) | |||||||
Financial – 20.1% (cont.) | |||||||
$ | 200,000 | Banponce Trust I, Series A, | |||||
8.327%, 02/01/2027 | |||||||
(Callable 09/08/2009) | $ | 117,593 | |||||
400,000 | Bear Stearns Cos., Inc., | ||||||
Series B, 6.95%, | |||||||
08/10/2012 | 434,742 | ||||||
1,000,000 | BOI Capital Funding III, | ||||||
6.107%, 02/04/2016 f | 375,000 | ||||||
170,000 | Capmark Financial | ||||||
Group, Inc., | |||||||
5.875%, 05/10/2012 | 44,169 | ||||||
600,000 | CIT Group Funding | ||||||
Company of Canada, | |||||||
5.20%, 06/01/2015 f | 347,573 | ||||||
Cit Group, Inc. | |||||||
Senior Notes: | |||||||
75,000 | 4.75%, 12/15/2010 | 58,876 | |||||
250,000 | 7.625%, 11/30/2012 | 171,186 | |||||
400,000 | 6.10%, 03/15/2067 | ||||||
(Callable 03/15/2017) | 151,716 | ||||||
700,000 | Citigroup Capital XXI, | ||||||
8.30%, 12/21/2077 | |||||||
(Callable 12/21/2037) | 545,877 | ||||||
825,000 | Countrywide Financial | ||||||
Corporation Subordinated | |||||||
Notes, 6.25%, 05/15/2016 | 731,919 | ||||||
500,000 | Export-Import | ||||||
Bank Korea Notes, | |||||||
4.625%, 03/16/2010 f | 502,020 | ||||||
500,000 | Fifth Third Bank, | ||||||
4.20%, 02/23/2010 | 499,634 | ||||||
500,000 | First Empire Capital Trust I, | ||||||
8.234%, 02/01/2027 | |||||||
(Callable 09/08/2009) | 329,707 | ||||||
1,000,000 | First Empire Capital Trust II, | ||||||
8.277%, 06/01/2027 | |||||||
(Callable 09/08/2009) | 660,615 | ||||||
1,100,000 | First National Bank | ||||||
of Omaha Subordinated | |||||||
Notes, 7.32%, 12/01/2010 | 1,080,001 | ||||||
1,300,000 | First Tennessee Capital I, | ||||||
8.07%, 01/06/2027 | 849,914 | ||||||
450,000 | First Union Capital I, | ||||||
Series A, 7.935%, | |||||||
01/15/2027 | 407,640 | ||||||
2,100,000 | GE Global Insurance | ||||||
Holding Corporation, | |||||||
7.50%, 06/15/2010 | 2,095,353 | ||||||
GMAC LLC: | |||||||
97,000 | 7.75%, 01/19/2010 | ||||||
(Acquired 04/29/2009; | |||||||
Cost $86,485) * | 94,575 | ||||||
49,000 | 7.50%, 12/31/2013 | ||||||
(Acquired 12/21/2006, | |||||||
12/26/2006 and 9/29/2008; | |||||||
Cost $29,284, $116,959 | |||||||
and $9,972, respectively) * | 37,975 | ||||||
250,000 | 6.75%, 12/01/2014 | 192,194 | |||||
59,000 | 8.000, 12/31/2018 | ||||||
(Acquired 12/21/2006, | |||||||
12/26/2006 and 9/29/2008; | |||||||
Cost $37,893, $151,329 | |||||||
and $11,985, respectively) * | 37,465 | ||||||
General Electric Capital | |||||||
Corporation Notes: | |||||||
150,000 | 6.00%, 06/15/2012 | 157,678 | |||||
1,000,000 | 5.625%, 09/15/2017 | 957,048 | |||||
General Motors Acceptance | |||||||
Corporation Notes: | |||||||
75,000 | 7.75%, 01/19/2010 | 73,136 | |||||
450,000 | 6.875%, 09/15/2011 | 386,923 |
The accompanying notes are an integral part of these financial statements.
Page 74
Baird Core Plus Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 97.3% (cont.) | |||||||
Financial – 20.1% (cont.) | |||||||
$ | 1,627,000 | Genworth Global | |||||
Funding Trust, | |||||||
5.125%, 03/15/2011 | $ | 1,570,359 | |||||
425,000 | Glencore Funding LLC, | ||||||
6.00%, 04/15/2014 | |||||||
(Acquired 03/31/2004, | |||||||
12/04/2006 and 9/28/2008; | |||||||
Cost $148,928, $198,740 | |||||||
and $72,035, respectively) * | 351,012 | ||||||
125,000 | Goldman Sachs Capital I, | ||||||
6.345%, 02/15/2034 | 100,845 | ||||||
Goldman Sachs Group, Inc.: | |||||||
100,000 | 5.15%, 01/15/2014 | 100,366 | |||||
1,000,000 | 5.95%, 01/18/2018 | 969,959 | |||||
530,000 | Goldman Sachs Group LP, | ||||||
8.000, 03/01/2013 | |||||||
(Acquired 05/19/2006 and | |||||||
12/23/2008; Cost $31,800 | |||||||
and $500,000, respectively) * | 574,015 | ||||||
800,000 | Hartford Financial | ||||||
Services Group, | |||||||
8.125%, 06/15/2068 | |||||||
(Callable 06/15/2018) | 560,000 | ||||||
175,000 | HSBC Bank PLC | ||||||
Subordinated Notes, | |||||||
6.95%, 03/15/2011 f | 179,772 | ||||||
250,000 | HSBC Finance Corporation, | ||||||
7.00%, 05/15/2012 | 257,742 | ||||||
550,000 | Huntington National Bank | ||||||
Notes, 8.00%, 04/01/2010 | 550,113 | ||||||
Invesco Ltd.: f | |||||||
1,570,000 | 5.625%, 04/17/2012 | 1,445,870 | |||||
1,110,000 | 5.375%, 12/15/2014 | 861,196 | |||||
400,000 | Istar Financial, Inc., | ||||||
5.85%, 03/15/2017 | 160,000 | ||||||
125,000 | JPMorgan Chase & Co., | ||||||
7.00%, 11/15/2009 | 126,957 | ||||||
100,000 | J.P. Morgan Chase Capital | ||||||
XV, 5.875%, 03/15/2035 | 80,000 | ||||||
400,000 | Jefferies Group, Inc., | ||||||
6.45%, 06/08/2027 | 294,241 | ||||||
600,000 | Key Bank NA, | ||||||
7.413%, 05/06/2015 | 537,851 | ||||||
Lehman Brothers | |||||||
Holdings, Inc. Notes: | |||||||
100,000 | 6.625%, 01/18/2012 @ | 14,750 | |||||
400,000 | 8.80%, 03/01/2015 @ | 59,000 | |||||
Liberty Mutual Group: | |||||||
50,000 | 6.50%, 03/15/2035 | ||||||
(Acquired 09/28/2008; | |||||||
Cost $36,977) * | 30,394 | ||||||
900,000 | 10.75%, 06/15/2088 | ||||||
(Callable 06/15/2038) | |||||||
(Acquired 05/21/2008, | |||||||
08/28/2008 and 05/06/2009; | |||||||
Cost $489,025, $113,750 | |||||||
and $147,312, respectively) * | 648,000 | ||||||
375,000 | Liberty Mutual Insurance, | ||||||
7.697%, 10/15/2097 | |||||||
(Acquired 03/26/2003; | |||||||
Cost $240,077) * | 224,337 | ||||||
825,000 | Lincoln National | ||||||
Corporation, | |||||||
6.05%, 04/20/2067 | |||||||
(Callable 04/20/2017) | 523,875 | ||||||
500,000 | Manufacturer And | ||||||
Traders Trust Co., | |||||||
6.625%, 12/04/2017 | 475,624 | ||||||
700,000 | Marsh & McLennan | ||||||
Companies, Inc., | |||||||
5.375%, 07/15/2014 | 681,456 |
The accompanying notes are an integral part of these financial statements.
Page 75
Baird Core Plus Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 97.3% (cont.) | |||||||
Financial – 20.1% (cont.) | |||||||
$ | 700,000 | MBIA Insurance Company, | |||||
14.00%, 01/15/2033 | |||||||
(Callable 01/15/2013) | |||||||
(Acquired 01/11/2008; | |||||||
Cost $700,000) * | $ | 266,000 | |||||
Merrill Lynch | |||||||
& Company: | |||||||
100,000 | 5.00%, 02/03/2014 | 95,932 | |||||
600,000 | 6.875%, 04/25/2018 | 555,334 | |||||
500,000 | 7.75%, 05/14/2038 | 464,452 | |||||
520,000 | M&I Marshall & Ilsley | ||||||
Bank Senior Unsecured | |||||||
Notes, 5.30%, 09/08/2011 | 456,909 | ||||||
828,000 | The Mony Group, Inc. | ||||||
Senior Unsecured Notes, | |||||||
8.35%, 03/15/2010 | 855,322 | ||||||
Morgan Stanley Senior | |||||||
Unsecured Notes: | |||||||
125,000 | 4.25%, 05/15/2010 | 126,418 | |||||
800,000 | 5.625%, 01/09/2012 | 818,726 | |||||
125,000 | 6.625%, 04/01/2018 | 124,613 | |||||
400,000 | National Australia Bank | ||||||
Ltd. Subordinated | |||||||
Notes, Series A, | |||||||
8.60%, 05/19/2010 f | 422,300 | ||||||
75,000 | National Bank of Hungary | ||||||
Yankee Debentures, | |||||||
8.875%, 11/01/2013 f | 76,883 | ||||||
871,000 | National City Bank, | ||||||
6.20%, 12/15/2011 | 895,128 | ||||||
500,000 | National City Bank of | ||||||
Kentucky Subordinated | |||||||
Notes, 6.30%, 02/15/2011 | 506,007 | ||||||
800,000 | Nationwide Financial | ||||||
Services, Inc., | |||||||
5.90%, 07/01/2012 | 785,836 | ||||||
1,459,000 | Navigators Group Inc. | ||||||
Senior Unsecured Notes, | |||||||
7.00%, 05/01/2016 | 1,134,387 | ||||||
750,000 | Pricoa Global Funding I, | ||||||
2.066%, 06/04/2010 | |||||||
(Acquired 04/29/2009; | |||||||
Cost $690,893) * | 743,600 | ||||||
550,000 | Principal Financial Group | ||||||
(AU) Senior Notes, 8.20%, | |||||||
08/15/2009 (Acquired | |||||||
09/16/2005, 12/23/2008 | |||||||
and 03/10/2009; Cost | |||||||
$100,416, $199,780 and | |||||||
$248,312, respectively) * f | 552,249 | ||||||
1,550,000 | Principal Life | ||||||
Income Funding, | |||||||
5.10%, 04/15/2014 | 1,546,959 | ||||||
950,000 | Protective Life Corporation | ||||||
Senior Notes, | |||||||
4.30%, 06/01/2013 | 879,522 | ||||||
1,400,000 | Regions Financing Trust II, | ||||||
6.625%, 05/01/2077 | |||||||
(Callable 05/15/2027) | 896,000 | ||||||
705,000 | Royal Bank of Scotland | ||||||
Group PLC, | |||||||
5.00%, 11/12/2013 f | 580,678 | ||||||
Santander Financial | |||||||
Issuances: f | |||||||
200,000 | 6.375%, 02/15/2011 | 199,581 | |||||
100,000 | 7.25%, 11/01/2015 | 94,332 | |||||
2,378,000 | Schwab Capital Trust I, | ||||||
7.50%, 11/15/2067 | |||||||
(Callable 11/15/2017) | 1,982,325 | ||||||
50,000 | SLM Corporation Senior | ||||||
Unsecured Notes, | |||||||
5.625%, 08/01/2033 | 30,784 |
The accompanying notes are an integral part of these financial statements.
Page 76
Baird Core Plus Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 97.3% (cont.) | |||||||
Financial – 20.1% (cont.) | |||||||
Sovereign Bancorp, Inc.: | |||||||
$ | 1,100,000 | 3.44%, 03/23/2010 | $ | 1,015,157 | |||
643,000 | 8.75%, 05/30/2018 | 632,393 | |||||
775,000 | Travelers Companies, Inc., | ||||||
6.25%, 03/15/2067 | 624,622 | ||||||
100,000 | UFJ Finance Aruba AEC, | ||||||
6.75%, 07/15/2013 f | 103,544 | ||||||
100,000 | Unitrin, Inc. Senior | ||||||
Unsecured Notes, | |||||||
6.00%, 05/15/2017 | 69,642 | ||||||
1,400,000 | Washington Mutual | ||||||
Preferred Funding Trust III, | |||||||
6.895%, 12/31/2049 | |||||||
(Callable 06/15/2012) | |||||||
(Acquired 12/12/2007 and | |||||||
02/05/2008; Cost | |||||||
$726,398 and $136,077, | |||||||
respectively) * @ | 17,500 | ||||||
42,911,699 | |||||||
Industrial – 14.2% | |||||||
420,663 | Atlas Air, Inc. Pass-Thru | ||||||
Certificates, Series 2000-1, | |||||||
8.707%, 07/02/2021 | 302,878 | ||||||
Bunge Ltd. Finance | |||||||
Corporation Notes: | |||||||
150,000 | 5.35%, 04/15/2014 | 145,949 | |||||
200,000 | 5.10%, 07/15/2015 | 183,394 | |||||
150,000 | CBS Corporation, | ||||||
7.70%, 07/30/2010 | 154,446 | ||||||
Clear Channel | |||||||
Communications Notes: | |||||||
375,000 | 4.50%, 01/15/2010 | 262,500 | |||||
50,000 | 5.50%, 12/15/2016 | 10,875 | |||||
275,000 | Comcast-Cable Holdings, | ||||||
7.875%, 08/01/2013 | 312,886 | ||||||
175,000 | Comcast Corporation, | ||||||
6.50%, 01/15/2017 | 185,651 | ||||||
500,000 | Comcast Holdings | ||||||
Corporation, | |||||||
10.625%, 07/15/2012 | 585,000 | ||||||
Continental Airlines, Inc. | |||||||
Pass-Thru Certificates: | |||||||
190,849 | Series 2000-2, Class C, | ||||||
8.312%, 10/02/2012 | 148,862 | ||||||
57,251 | Series 1997-4, | ||||||
6.90%, 01/02/2018 | 49,809 | ||||||
COX Communications, | |||||||
Inc. Notes: | |||||||
600,000 | 7.875%, 08/15/2009 | 603,595 | |||||
600,000 | 4.625%, 01/15/2010 | 602,844 | |||||
800,000 | 5.45%, 12/15/2014 | 794,150 | |||||
750,000 | CSX Corporation, | ||||||
6.25%, 04/01/2015 | 775,386 | ||||||
325,000 | Deutsche Telekom | ||||||
International Finance BV, | |||||||
8.25%, 06/15/2030 f | 380,487 | ||||||
250,000 | Donnelley (R.R.) | ||||||
& Sons Co., | |||||||
6.125%, 01/15/2017 | 219,902 | ||||||
381,366 | Federal Express 1995 | ||||||
Corporation Pass-Thru | |||||||
Certificates, Series B2, | |||||||
7.11%, 01/02/2014 | 385,179 | ||||||
500,000 | First Data Corporation, | ||||||
9.875%, 09/24/2015 | |||||||
(Callable 09/30/2011) | 355,000 | ||||||
600,000 | Fiserv, Inc., | ||||||
6.125%, 11/20/2012 | 622,798 | ||||||
775,000 | Ford Motor Company | ||||||
Debentures, | |||||||
9.215%, 09/15/2021 | 449,500 |
The accompanying notes are an integral part of these financial statements.
Page 77
Baird Core Plus Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 97.3% (cont.) | |||||||
Industrial – 14.2% (cont.) | |||||||
$ | 350,000 | Georgia Pacific LLC, | |||||
9.50%, 12/01/2011 | $ | 360,500 | |||||
500,000 | GTE Corporation, | ||||||
8.75%, 11/01/2021 | 568,199 | ||||||
1,175,000 | Hanson Australia Funding, | ||||||
5.25%, 03/15/2013 f | 923,902 | ||||||
Hanson PLC Notes: f | |||||||
1,150,000 | 7.875%, 09/27/2010 | 1,109,750 | |||||
350,000 | 6.125%, 08/15/2016 | 261,625 | |||||
100,000 | Health Care Service | ||||||
Corporation Notes, | |||||||
7.75%, 06/15/2011 | |||||||
(Acquired 01/26/2005; | |||||||
Cost $105,124) * | 104,673 | ||||||
350,000 | Health Management | ||||||
Association, | |||||||
6.125%, 04/15/2016 | 300,125 | ||||||
Historic TW, Inc.: | |||||||
600,000 | 9.125%, 01/15/2013 | 660,601 | |||||
92,000 | 6.875%, 06/15/2018 | 92,935 | |||||
800,000 | Humana Inc., | ||||||
7.20%, 06/15/2018 | 720,913 | ||||||
825,000 | International | ||||||
Paper Company, | |||||||
7.40%, 06/15/2014 | 821,253 | ||||||
125,000 | Lafarge S.A. Senior | ||||||
Unsecured Notes, | |||||||
7.125%, 07/15/2036 f | 96,455 | ||||||
300,000 | Martin Marietta | ||||||
Materials, Inc., | |||||||
6.25%, 05/01/2037 | 219,502 | ||||||
225,000 | Masco Corporation, | ||||||
6.125%, 10/03/2016 | 188,909 | ||||||
250,000 | Nabors Industries, Inc., | ||||||
6.15%, 02/15/2018 | 239,990 | ||||||
New Cingular | |||||||
Wireless Services, Inc. | |||||||
Senior Notes: | |||||||
700,000 | 7.875%, 03/01/2011 | 754,925 | |||||
350,000 | 8.75%, 03/01/2031 | 426,583 | |||||
150,000 | Nextel Communications | ||||||
Senior Notes, Series E, | |||||||
6.875%, 10/31/2013 | |||||||
(Callable 09/08/2009) | 124,125 | ||||||
50,000 | Pactiv Corporation | ||||||
Senior Unsecured Notes, | |||||||
7.95%, 12/15/2025 | 46,894 | ||||||
200,000 | PCCW-HWT | ||||||
Capital II Ltd., | |||||||
6.00%, 07/15/2013 | |||||||
(Acquired 07/10/2003; | |||||||
Cost $199,066) * f | 195,415 | ||||||
100,000 | PCCW-HKT | ||||||
Capital III Ltd., | |||||||
5.25%, 07/20/2015 | |||||||
(Acquired 09/29/2008; | |||||||
Cost $84,754) * f | 89,641 | ||||||
75,000 | Pearson Dollar Finance PLC, | ||||||
5.70%, 06/01/2014 | |||||||
(Acquired 09/29/2008, | |||||||
Cost $73,356) * f | 74,183 | ||||||
575,000 | PEMEX Project Funding | ||||||
Master Trust, | |||||||
9.125%, 10/13/2010 | 620,310 | ||||||
1,100,000 | Plum Creek Timberlands, | ||||||
5.875%, 11/15/2015 | 929,849 | ||||||
1,240,000 | Premcor Refining Group | ||||||
Senior Unsecured Notes, | |||||||
7.50%, 06/15/2015 | |||||||
(Callable 09/08/2009) | 1,286,533 | ||||||
925,000 | Rio Tinto Financial USA | ||||||
Ltd., 6.50%, 07/15/2018 f | 925,539 |
The accompanying notes are an integral part of these financial statements.
Page 78
Baird Core Plus Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 97.3% (cont.) | |||||||
Industrial – 14.2% (cont.) | |||||||
$ | 610,000 | SK Telecom, | |||||
6.625%, 07/20/2027 | |||||||
(Acquired 07/13/2007, | |||||||
09/29/2008 and | |||||||
04/08/2009; Cost | |||||||
$197,602, $100,537 | |||||||
and $242,206, | |||||||
respectively) * f | $ | 563,711 | |||||
Sprint Capital | |||||||
Corporation: | |||||||
675,000 | 6.90%, 05/01/2019 | 558,563 | |||||
300,000 | 8.75%, 03/15/2032 | 241,500 | |||||
100,000 | Sunoco, Inc. | ||||||
Senior Unsecured Notes, | |||||||
5.75%, 01/15/2017 | 96,868 | ||||||
Telecom Italia Capital: f | |||||||
340,000 | 4.95%, 09/30/2014 | 325,488 | |||||
1,425,000 | 7.20%, 07/18/2036 | 1,381,652 | |||||
300,000 | Telefonica Emisiones, | ||||||
S.A.U., | |||||||
6.421%, 06/20/2016 f | 320,763 | ||||||
Time Warner, Inc.: | |||||||
450,000 | 7.625%, 04/15/2031 | 437,470 | |||||
95,000 | 7.70%, 05/01/2032 | 93,353 | |||||
25,000 | Time Warner | ||||||
Entertainment | |||||||
Senior Notes, | |||||||
8.875%, 10/01/2012 | 26,848 | ||||||
500,000 | Transocean, Ltd., | ||||||
6.80%, 03/15/2038 f | 534,804 | ||||||
500,000 | Tyco Electronics | ||||||
Group S.A., | |||||||
7.125%, 10/01/2037 f | 405,136 | ||||||
Tyco International | |||||||
Finance: f | |||||||
125,000 | 6.375%, 10/15/2011 | 131,717 | |||||
50,000 | 6.00%, 11/15/2013 | 50,841 | |||||
United AirLines, Inc. | |||||||
Pass-Thru Certificates: | |||||||
164,651 | Series 1991-A, Class A-2, | ||||||
10.02%, 03/22/2014 | 55,158 | ||||||
14,286 | Series 2001-1, Class A-2, | ||||||
6.201%, 12/31/2049 | 14,143 | ||||||
686,771 | Series 2000-2, Class C, | ||||||
7.762%, 10/01/2049 | 588,906 | ||||||
1,000,000 | Unitedhealth Group, Inc. | ||||||
Senior Unsecured Notes, | |||||||
6.00%, 02/15/2018 | 959,724 | ||||||
US Airways | |||||||
Pass-Thru Trust, | |||||||
488,370 | Series 1998-1, Class B, | ||||||
7.350%, 07/30/2019 # ** | 290,775 | ||||||
322,000 | USX Corporation, | ||||||
9.125%, 01/15/2013 | 348,324 | ||||||
Vale Overseas Limited: f | |||||||
100,000 | 8.25%, 01/17/2034 | 112,471 | |||||
250,000 | 6.875%, 11/21/2036 | 237,376 | |||||
350,000 | Verizon New York Inc. | ||||||
Senior Unsecured Notes, | |||||||
8.625%, 11/15/2010 | 373,949 | ||||||
150,000 | Viacom, Inc. Senior Notes, | ||||||
6.25%, 04/30/2016 | 147,774 | ||||||
Vodafone Group PLC: f | |||||||
400,000 | 5.50%, 06/15/2011 | 420,878 | |||||
500,000 | 6.15%, 02/27/2037 | 491,926 | |||||
500,000 | Vulcan Materials, | ||||||
7.15%, 11/30/2037 | 422,700 | ||||||
75,000 | Wellpoint Inc., | ||||||
5.95%, 12/15/2034 | 60,373 |
The accompanying notes are an integral part of these financial statements.
Page 79
Baird Core Plus Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 97.3% (cont.) | |||||||
Industrial – 14.2% (cont.) | |||||||
$ | 1,000,000 | Woodside Finance Ltd., | |||||
8.125%, 03/01/2014 | |||||||
(Acquired 02/24/2009; | |||||||
Cost $999,690) * f | $ | 1,076,318 | |||||
30,443,929 | |||||||
Mortgage Backed Securities – 36.5% | |||||||
Bank of America | |||||||
Alternative Loan Trust: | |||||||
140,059 | Series 2004-2, Class 5A1, | ||||||
5.50%, 03/25/2019 | 127,465 | ||||||
151,387 | Series 2005-2, Class 4A1, | ||||||
5.50%, 03/25/2020 | 140,270 | ||||||
312,940 | Series 2006-2, Class 6A1, | ||||||
5.50%, 03/25/2021 | 264,923 | ||||||
121,850 | Series 2006-3, Class 6A1, | ||||||
6.00%, 04/25/2036 | 89,217 | ||||||
293,528 | Series 2006-5, Class CB7, | ||||||
6.00%, 06/25/2046 | 200,083 | ||||||
Chase Mortgage | |||||||
Finance Corporation: | |||||||
83,848 | Series 2003-S13, Class A11, | ||||||
5.50%, 11/25/2033 | 83,577 | ||||||
700,000 | Series 2006-A1, Class 2A3, | ||||||
6.00%, 09/25/2036 | 339,075 | ||||||
107,139 | Citicorp Mortgage | ||||||
Securities, Inc., | |||||||
Series 2004-4, Class A5, | |||||||
5.50%, 06/25/2034 | 105,748 | ||||||
Citigroup Mortgage | |||||||
Loan Trust, Inc.: | |||||||
302,060 | Series 2005-9, Class 2A2, | ||||||
5.50%, 11/25/2035 | 142,937 | ||||||
191,240 | Series 2005-9, Class 22A2, | ||||||
6.00%, 11/25/2035 | 230,075 | ||||||
Countrywide Alternative | |||||||
Loan Trust: | |||||||
943,924 | Series 2006-7CB, Class | ||||||
3A1, 5.25%, 05/25/2021 | 657,502 | ||||||
216,392 | Series 2006-43CB, Class | ||||||
2A1, 6.00%, 02/25/2022 | 164,120 | ||||||
1,300,000 | Series 2005-10CB, Class | ||||||
1A6, 5.50%, 05/25/2035 | 933,248 | ||||||
1,434,932 | Series 2006-28CB, Class | ||||||
A17, 6.00%, 10/25/2036 | 960,864 | ||||||
458,235 | Series 2006-J2, Class A3, | ||||||
6.00%, 04/25/2036 | 289,112 | ||||||
105,433 | CS First Boston Mortgage | ||||||
Securities Corporation, | |||||||
Series 2005-11, Class 5A1, | |||||||
5.25%, 12/25/2020 | 94,749 | ||||||
155,475 | Deutsche Alternative | ||||||
Securities Inc. Mortgage, | |||||||
Series 2005-4, Class A2, | |||||||
5.05%, 09/25/2035 | 146,981 | ||||||
368,348 | Deutsche Securities Inc. | ||||||
Mortgage, Series | |||||||
2006-AR5, Class 21A, | |||||||
6.00%, 10/25/2021 | 205,693 | ||||||
103,918 | DLJ Commercial | ||||||
Mortgage Corporation, | |||||||
Series 1999-CG3, Class | |||||||
A1B, 7.34%, 10/10/2032 | 103,804 | ||||||
Federal Gold Loan Mortgage | |||||||
Corporation (FGLMC): | |||||||
431,164 | 5.50%, 11/01/2017 | 452,723 | |||||
453,078 | 5.00%, 12/01/2020 | 471,456 | |||||
803,584 | 5.00%, 05/01/2021 | 836,179 | |||||
175,604 | 6.00%, 06/01/2021 | 185,937 | |||||
126,680 | 6.50%, 12/01/2028 | 136,183 | |||||
60,504 | 6.50%, 06/01/2029 | 65,005 | |||||
3,152,974 | 5.50%, 04/01/2037 | 3,259,356 |
The accompanying notes are an integral part of these financial statements.
Page 80
Baird Core Plus Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 97.3% (cont.) | |||||||
Mortgage Backed Securities – 36.5% (cont.) | |||||||
Federal Home Loan | |||||||
Mortgage Corporation | |||||||
(FHLMC): | |||||||
$ | 305,715 | Series 3122, Class VA, | |||||
6.00%, 01/15/2017 | $ | 323,402 | |||||
2,691,453 | Series R010, Class VA, | ||||||
5.50%, 04/15/2017 | 2,884,023 | ||||||
1,591,919 | Series R010, Class AB, | ||||||
5.50%, 12/15/2019 | 1,638,268 | ||||||
13,457 | Series 1053, Class G, | ||||||
7.00%, 03/15/2021 | 14,406 | ||||||
30,015 | Series 136, Class E, | ||||||
6.00%, 04/15/2021 | 31,318 | ||||||
236,356 | Series 2804, Class VC, | ||||||
5.00%, 07/15/2021 | 247,784 | ||||||
25,194 | Series 1122, Class G, | ||||||
7.00%, 08/15/2021 | 26,781 | ||||||
58,221 | Series 1186, Class I, | ||||||
7.00%, 12/15/2021 | 58,194 | ||||||
138,977 | Series 3132, Class MA, | ||||||
5.50%, 12/15/2023 | 144,654 | ||||||
209,175 | Series 2598, Class QC, | ||||||
4.50%, 06/15/2027 | 210,445 | ||||||
Federal National Mortgage | |||||||
Association (FNMA): | |||||||
1,657,225 | 5.50%, 03/01/2023 | 1,724,889 | |||||
665,586 | 5.50%, 07/01/2023 | 692,762 | |||||
920,212 | 5.50%, 12/01/2023 | 957,784 | |||||
230,313 | 6.00%, 03/01/2026 | 242,506 | |||||
1,289,859 | 5.00%, 05/01/2028 | 1,322,559 | |||||
101,439 | 6.50%, 09/01/2028 | 109,366 | |||||
198,391 | 6.50%, 02/01/2029 | 213,894 | |||||
154,508 | 5.50%, 01/01/2032 | 160,470 | |||||
1,672,075 | 5.50%, 04/01/2034 | 1,735,023 | |||||
4,265,383 | 5.50%, 04/01/2034 | 4,420,262 | |||||
170,454 | 5.50%, 02/01/2035 | 176,764 | |||||
2,886,933 | 5.50%, 02/01/2035 | 2,993,811 | |||||
4,674,974 | 5.00%, 02/01/2036 | 4,776,326 | |||||
14,171,181 | 5.50%, 04/01/2036 | 14,682,534 | |||||
1,749,824 | 6.00%, 08/01/2037 | 1,825,866 | |||||
12,460 | Series 1989-94, Class G, | ||||||
7.50%, 12/25/2019 | 13,680 | ||||||
52,528 | Series 1990-15, Class J, | ||||||
7.00%, 02/25/2020 | 56,993 | ||||||
10,367 | Series 1991-21, Class J, | ||||||
7.00%, 03/25/2021 | 11,193 | ||||||
192,519 | Series 1991-43, Class J, | ||||||
7.00%, 05/25/2021 | 208,591 | ||||||
254,442 | Series 1991-65, Class Z, | ||||||
6.50%, 06/25/2021 | 270,564 | ||||||
386,420 | Series 1992-129, Class L, | ||||||
6.00%, 07/25/2022 | 400,850 | ||||||
1,047,506 | Series 2003-33, Class LD, | ||||||
4.25%, 09/25/2022 | 1,080,082 | ||||||
75,846 | Series 1993-32, Class H, | ||||||
6.00%, 03/25/2023 | 80,259 | ||||||
408,903 | Series 1993-58, Class H, | ||||||
5.50%, 04/25/2023 | 437,513 | ||||||
86,093 | Series 2003-31, Class KG, | ||||||
4.50%, 12/25/2028 | 86,990 | ||||||
2,056,756 | Series 2002-85, Class PD, | ||||||
5.50%, 05/25/2031 | 2,119,386 | ||||||
34,170 | Series 2003-44, Class AB, | ||||||
3.75%, 05/25/2033 | 34,009 | ||||||
816,269 | Series 2004-W6, Class | ||||||
1A4, 5.50%, 07/25/2034 | 764,199 | ||||||
701,192 | Series 2004-W6, Class | ||||||
1A6, 5.50%, 07/25/2034 | 732,526 | ||||||
1,500,000 | Series 2004-W10, Class | ||||||
A4, 5.75%, 08/25/2034 | 1,407,719 |
The accompanying notes are an integral part of these financial statements.
Page 81
Baird Core Plus Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 97.3% (cont.) | |||||||
Mortgage Backed Securities – 36.5% (cont.) | |||||||
First Horizon Alternative | |||||||
Mortgage Securities: | |||||||
$ | 217,783 | Series 2006-FA6, Class | |||||
3A1, 5.75%, 11/25/2021 | $ | 176,064 | |||||
1,667,080 | Series 2006-FA8, Class | ||||||
2A1, 5.75%, 02/25/2037 | 932,450 | ||||||
1,075,000 | First Union National Bank | ||||||
Commercial Mortgage | |||||||
Securities Inc., Series | |||||||
2001-C4, Class A2, | |||||||
6.223%, 12/12/2033 | 1,105,425 | ||||||
GE Capital Commercial | |||||||
Mortgage Corporation: | |||||||
1,160,748 | Series 2000-1, Class A2, | ||||||
6.496%, 01/15/2033 | 1,172,187 | ||||||
1,610,000 | Series 2003-C2, Class A4, | ||||||
5.145%, 07/10/2037 | 1,520,647 | ||||||
950,000 | Series 2004-C3, Class A4, | ||||||
5.189%, 07/10/2039 | 847,343 | ||||||
GMAC Commercial | |||||||
Mortgage Securities, Inc.: | |||||||
236,107 | Series 2001-C1, Class A2, | ||||||
6.465%, 04/15/2034 | 240,045 | ||||||
1,750,000 | Series 2003-C1, Class A2, | ||||||
4.079%, 05/10/2036 | 1,630,785 | ||||||
Government National | |||||||
Mortgage Association | |||||||
(GNMA): | |||||||
115,558 | 6.00%, 12/20/2028 | 120,903 | |||||
44,581 | 6.50%, 01/20/2029 | 48,017 | |||||
110,358 | 6.00%, 11/20/2033 | 114,999 | |||||
580,391 | Series 2003-2, Class PB, | ||||||
5.50%, 03/20/2032 | 600,664 | ||||||
J.P. Morgan Alternative | |||||||
Loan Trust: | |||||||
1,539,013 | Series 2005-S1, Class | ||||||
3A1, 5.50%, 10/25/2020 | 1,041,239 | ||||||
253,680 | Series 2006-A1, Class | ||||||
2A1, 5.799%, 03/25/2036 | 143,293 | ||||||
300,000 | Series 2006-S3, Class A3A, | ||||||
6.00%, 08/25/2036 | 165,666 | ||||||
J.P. Morgan Mortgage Trust: | |||||||
850,000 | Series 2006-A7, Class | ||||||
2A4R, 5.457%, 01/25/2037 | 449,101 | ||||||
950,000 | Series 2007-A2, Class 2A3, | ||||||
5.715%, 04/25/2037 | 530,292 | ||||||
Master Alternative | |||||||
Loans Trust: | |||||||
778,423 | Series 2004-1, Class 1A1, | ||||||
5.00%, 01/25/2019 | 688,661 | ||||||
485,481 | Series 2005-3, Class 4A1, | ||||||
5.50%, 03/25/2020 | 391,685 | ||||||
160,616 | Series 2003-5, Class 6A1, | ||||||
6.00%, 08/25/2033 | 135,695 | ||||||
139,614 | Merrill Lynch Mortgage | ||||||
Investors Trust, Series | |||||||
2005-A8, Class A1C1, | |||||||
5.25%, 08/25/2036 | 122,236 | ||||||
210,373 | Residential Accredit Loans, | ||||||
Inc., Series 2005-QS2, | |||||||
Class A1, 5.50%, | |||||||
02/25/2035 | 173,683 | ||||||
Salomon Brothers Mortgage | |||||||
Securities VII: | |||||||
398,680 | Series 2000-C1, Class A2, | ||||||
7.52%, 12/18/2009 | 401,122 | ||||||
1,829,334 | Series 2001-C2, Class A3, | ||||||
6.50%, 10/13/2011 | 1,877,529 |
The accompanying notes are an integral part of these financial statements.
Page 82
Baird Core Plus Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 97.3% (cont.) | |||||||
Mortgage Backed Securities – 36.5% (cont.) | |||||||
$ | 1,208,079 | Series 2000-C2, Class A2, | |||||
7.455%, 07/18/2033 | $ | 1,225,808 | |||||
1,250,000 | Wachovia Bank | ||||||
Commercial Mortgage | |||||||
Trust, Series 2003-C3, | |||||||
Class A2, 4.867%, | |||||||
02/15/2035 | 1,160,370 | ||||||
Washington Mutual, Inc. | |||||||
Pass-Thru Certificates: | |||||||
296,388 | Series 2004-CB1, Class 5A, | ||||||
5.00%, 06/25/2019 | 291,850 | ||||||
523,769 | Series 2004-CB2, Class 7A, | ||||||
5.50%, 08/25/2019 | 495,780 | ||||||
173,750 | Series 2004-CB3, Class 4A, | ||||||
6.00%, 10/25/2019 | 157,841 | ||||||
276,195 | Series 2004-CB4, Class | ||||||
22A, 6.00%, 12/25/2019 | 249,279 | ||||||
78,215,586 | |||||||
Taxable Municipal Bonds – 0.9% | |||||||
2,610,000 | Tobacco Settlement | ||||||
Authority Iowa, | |||||||
6.50%, 06/01/2023 | 1,952,410 | ||||||
45,046 | Tobacco Settlement | ||||||
Financing Corporation, | |||||||
Series 2001-A, Class A, | |||||||
6.36%, 05/15/2025 | 41,482 | ||||||
1,993,892 | |||||||
Utilities – 7.7% | |||||||
1,000,000 | Ameren Corporation, | ||||||
8.875%, 05/15/2014 | 1,032,139 | ||||||
300,000 | Appalachian Power | ||||||
Company Senior Unsecured | |||||||
Notes, 6.70%, 08/15/2037 | 299,482 | ||||||
1,000,000 | Arizona Pubic Service | ||||||
Senior Unsecured Notes, | |||||||
8.75%, 03/01/2019 | 1,090,284 | ||||||
165,000 | Cilcorp Inc. Senior Notes, | ||||||
8.70%, 10/15/2009 | 161,700 | ||||||
750,000 | Commonwealth Edison, | ||||||
5.40%, 12/15/2011 | 784,468 | ||||||
500,000 | Encana Corporation | ||||||
6.50%, 05/15/2019 f | 536,003 | ||||||
500,000 | Enel Finance International, | ||||||
6.80%, 09/15/2037 | |||||||
(Acquired 09/13/2007 | |||||||
and 9/29/2008; Cost | |||||||
$398,940 and $99,957, | |||||||
respectively) * f | 518,350 | ||||||
150,000 | Energy Transfer Partners, | ||||||
5.65%, 08/01/2012 | 152,965 | ||||||
225,000 | Exelon Corporation | ||||||
Senior Unsecured Notes, | |||||||
5.625%, 06/15/2035 | 181,112 | ||||||
1,000,000 | FPL Group Capital, Inc., | ||||||
Series D, 7.30%, | |||||||
09/01/2067 (Callable | |||||||
09/01/2017) | 850,000 | ||||||
542,572 | GG1C Funding | ||||||
Corporation, | |||||||
5.129%, 01/15/2014 | |||||||
(Acquired 11/21/2008; | |||||||
Cost $519,659) * | 499,356 | ||||||
Kinder Morgan Energy | |||||||
Partners Senior Notes: | |||||||
100,000 | 6.50%, 02/01/2037 | 91,321 | |||||
250,000 | 6.95%, 01/15/2038 | 242,173 | |||||
300,000 | Kinder Morgan Finance, | ||||||
5.70%, 01/05/2016 f | 257,250 |
The accompanying notes are an integral part of these financial statements.
Page 83
Baird Core Plus Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
LONG-TERM INVESTMENTS – 97.3% (cont.) | |||||||
Utilities – 7.7% (cont.) | |||||||
$ | 57,461 | Kiowa Power Partners LLC, | |||||
4.811%, 12/30/2013 | |||||||
(Acquired 11/19/2004; | |||||||
Cost $60,236) * | $ | 52,947 | |||||
115,000 | Korea Electric Power | ||||||
Corporation, | |||||||
6.75%, 08/01/2027 f | 87,416 | ||||||
1,000,000 | Marathon Oil Corporation | ||||||
Senior Unsecured Notes, | |||||||
7.50%, 02/15/2019 | 1,091,452 | ||||||
800,000 | MidAmerican Funding, | ||||||
LLC, 6.75%, 03/01/2011 | 854,359 | ||||||
100,000 | National Grid PLC | ||||||
Senior Unsecured Notes, | |||||||
6.30%, 08/01/2016 f | 102,739 | ||||||
National Rural Utilities | |||||||
�� | Senior Unsecured Notes: | ||||||
200,000 | 7.25%, 03/01/2012 | 218,447 | |||||
600,000 | 10.375%, 11/01/2018 | 752,294 | |||||
Nisource Finance | |||||||
Corporation: | |||||||
536,000 | 6.15%, 03/01/2013 | 532,800 | |||||
1,583,000 | 5.40%, 07/15/2014 | 1,497,863 | |||||
800,000 | ONEOK, Inc. | ||||||
Senior Notes, | |||||||
7.125%, 04/15/2011 | 843,470 | ||||||
475,000 | Pepco Holdings, Inc., | ||||||
Senior Notes, | |||||||
6.125%, 06/01/2017 | 439,981 | ||||||
200,000 | PPL Energy Supply LLC | ||||||
Senior Unsecured Notes, | |||||||
6.20%, 05/15/2016 | 199,199 | ||||||
100,000 | PPL Energy Supply, | ||||||
LLC Bonds, Series A, | |||||||
5.70%, 10/15/2015 | 100,929 | ||||||
200,000 | PSE&G Energy Holdings | ||||||
LLC Senior Notes, | |||||||
8.50%, 06/15/2011 | 201,923 | ||||||
500,000 | Public Service Company | ||||||
Of New Mexico, | |||||||
7.95%, 05/15/2018 | 485,419 | ||||||
284,470 | RGS (I&M) Funding | ||||||
Corporation Debentures, | |||||||
9.82%, 12/07/2022 | 311,286 | ||||||
300,000 | Southern Natural Gas, | ||||||
5.90%, 04/01/2017 | |||||||
(Acquired 03/14/2007; | |||||||
Cost $299,502) * | 290,552 | ||||||
1,100,000 | Spectra Energy Capital, | ||||||
5.668%, 08/15/2014 | 1,110,737 | ||||||
Williams Cos. Inc. Notes: | |||||||
175,000 | 7.125%, 09/01/2011 | 178,474 | |||||
350,000 | 7.875%, 09/01/2021 | 344,750 | |||||
16,393,640 | |||||||
U.S. Treasury Obligations – 10.6% | |||||||
18,550,000 | U.S. Treasury Bonds, | ||||||
6.25%, 08/15/2023 | 22,596,219 | ||||||
Total Long-Term | |||||||
Investments | |||||||
(Cost $217,504,078) | 208,273,185 | ||||||
Shares | |||||||
SHORT-TERM INVESTMENTS – 1.6% | |||||||
Money Market Fund – 1.6% | |||||||
3,382,045 | Short-Term Investment | ||||||
Company Liquid Assets | |||||||
Portfolio – AIM Fund | 3,382,045 | ||||||
Total Short-Term | |||||||
Investments | |||||||
(Cost $3,382,045) | 3,382,045 |
The accompanying notes are an integral part of these financial statements.
Page 84
Baird Core Plus Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
INVESTMENTS PURCHASED | |||||||
WITH CASH PROCEEDS FROM | |||||||
SECURITIES LENDING – 21.7% | |||||||
Commercial Paper – 0.2% | |||||||
$ | 410,573 | Atlantic East | |||||
Funding LLC, | |||||||
3.059%, 03/25/10 # ** | $ | 410,573 | |||||
410,573 | |||||||
Corporate Bond – 0.3% | |||||||
765,354 | Svenska Handelsbanken, | ||||||
4.418%, 08/06/09 f | 765,354 | ||||||
765,354 | |||||||
Shares | |||||||
Investment Companies – 21.2% | |||||||
45,066,963 | Mount Vernon | ||||||
Securities Lending | |||||||
Trust Prime Portfolio | 45,066,963 | ||||||
330,696 | Reserve Primary | ||||||
Fund # ** | 330,696 | ||||||
45,397,659 | |||||||
Total Investments | |||||||
Purchased With Cash | |||||||
Proceeds From | |||||||
Securities Lending | |||||||
(Cost $46,573,586) | 46,573,586 | ||||||
Total Investments | |||||||
(Cost $267,459,709) – | |||||||
120.6% | 258,228,816 | ||||||
Liabilities in Excess of | |||||||
Other Assets – (20.6)% | (44,159,046 | ) | |||||
TOTAL NET | |||||||
ASSETS – 100.0% | $ | 214,069,770 |
* | Restricted Security Deemed Liquid |
** | Illiquid Security |
f | Foreign Security |
# | Priced at Fair Value by the Valuation Committee as delegated by the Baird Funds’ Board of Directors |
@ | Security in Default |
The accompanying notes are an integral part of these financial statements.
Page 85
Baird Core Plus Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
SFAS 157 – Summary of Fair Value Exposure at June 30, 2009
As adopted by the Fund, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“SFAS 157”) defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. Under SFAS 157, various inputs are used in determining the value of the Fund’s investments. These inputs are summarized into three broad levels and described below:
Level 1 – | Quoted prices in active markets for identical securities. |
Level 2 – | Other significant observable inputs (including quoted prices for similar securities, quoted prices for identical securities in inactive markets, dealer indications, interest rates, yield curves, benchmark yields, issuer spreads, prepayment speeds, cash flows, credit risk, default rates, information about issuers, sectors and markets, inputs corroborated by observable market data, etc.) |
Level 3 – | Significant unobservable inputs (including the Fund’s own assumptions about the assumptions that market participants would use in pricing the security). |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Fund’s investments as of June 30, 2009:
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Fixed Income | ||||||||||||||||
Asset Backed Securities | $ | — | $ | 15,518,220 | $ | 200,000 | $ | 15,718,220 | ||||||||
Corporate Debt Securities | — | 89,458,493 | 290,775 | 89,749,268 | ||||||||||||
Mortgage Backed Securities | — | 78,215,586 | — | 78,215,586 | ||||||||||||
Taxable Municipal Bonds | — | 1,993,892 | — | 1,993,892 | ||||||||||||
U.S. Treasury Obligations | — | 22,596,219 | — | 22,596,219 | ||||||||||||
Total Fixed Income | — | 207,782,410 | 490,775 | 208,273,185 | ||||||||||||
Short-Term Investments | ||||||||||||||||
Money Market Mutual Funds | 3,382,045 | — | — | 3,382,045 | ||||||||||||
Total Short-Term Investments | 3,382,045 | — | — | 3,382,045 | ||||||||||||
Investments Purchased With Cash | ||||||||||||||||
Proceeds From Securities Lending | ||||||||||||||||
Commercial Paper | — | 410,573 | — | 410,573 | ||||||||||||
Corporate Bonds | — | 765,354 | — | 765,354 | ||||||||||||
Money Market Mutual Funds | 45,066,963 | — | 330,696 | 45,397,659 | ||||||||||||
Total Investments Purchased With Cash | ||||||||||||||||
Proceeds From Securities Lending | 45,066,963 | 1,175,927 | 330,696 | 46,573,586 | ||||||||||||
Total Investments in Securities | $ | 48,449,008 | $ | 208,958,337 | $ | 821,471 | $ | 258,228,816 |
Page 86
Baird Core Plus Bond Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Level 3 Reconciliation Disclosure
Following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value.
Description | Investments in Securities | |||
Balance as of December 31, 2008 | $ | 1,211,045 | ||
Accrued discounts/premiums | — | |||
Realized gain (loss) | 14,671 | |||
Change in unrealized appreciation (depreciation) | 195,552 | |||
Net purchases (sales/paydowns) | (533,114 | ) | ||
Transfers in and/or out of Level 3 * | (66,683 | ) | ||
Balance as of June 30, 2009 | $ | 821,471 | ||
Change in unrealized appreciation (depreciation) during | ||||
the year for level 3 investments held at June 30, 2009. | 195,552 |
* | The information used in the above reconciliation represents fiscal year to date activity for any investments identified as using Level 3 inputs at either the beginning or end of the current fiscal period. Transfers in or out of Level 3 represents either the beginning value (for transfers in) or ending value (for transfers out) of any security or instrument where a change in the pricing level occurred from the beginning to the end of the period. |
Page 87
Baird Funds, Inc.
Additional Information on Fund Expenses June 30, 2009 (Unaudited) |
Example
As a shareholder of a mutual fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments, reinvested dividends, or other distributions; redemption fees; and exchange fees; and (2) ongoing costs, such as management fees; distribution and/or service (12b-1) fees; and other fund expenses. Although the Funds do not charge any sales loads, redemption fees, or other transaction fees, you will be assessed fees for outgoing wire transfers, returned checks and stop payment orders at prevailing rates charged by U.S. Bancorp Fund Services, LLC, the Funds’ transfer agent. If you request that a redemption be made by wire transfer, currently the Funds’ transfer agent charges a $15.00 fee.
This Example is intended to help you understand your ongoing costs (in dollars) of investing in each Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (1/1/09 – 6/30/09).
Actual Expenses
The third and fourth columns of the following table provide information about account values based on actual returns and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the fourth column entitled “Expenses Paid During Period’’ to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The fifth and sixth columns of the following table provide information about hypothetical account values and hypothetical expenses based on the Funds’ actual expense ratios and an assumed rate of return of 5% per year before expenses, which is not the Funds’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds and other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other mutual funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the sixth column of the table (entitled “Expenses Paid During Period”) is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different mutual funds. In addition, if these transactional costs were included, your costs could have been higher.
Page 88
Baird Funds, Inc.
Additional Information on Fund Expenses June 30, 2009 (Unaudited) |
Actual vs. Hypothetical Returns
For the Six Months Ended June 30, 2009
Hypothetical (5% return | |||||||||||
Actual | before expenses) | ||||||||||
Fund’s | Beginning | Ending | Expenses | Ending | Expenses | ||||||
Annualized | Account | Account | Paid | Account | Paid | ||||||
Expense | Value | Value | During | Value | During | ||||||
Ratio(1) | 1/1/09 | 6/30/09 | Period(1) | 6/30/09 | Period(1) | ||||||
Baird Short-Term Bond Fund | |||||||||||
Institutional Class | 0.30% | $1,000.00 | $1,038.60 | $1.52 | $1,023.31 | $1.51 | |||||
Baird Intermediate Bond Fund | |||||||||||
Institutional Class | 0.30% | $1,000.00 | $1,053.00 | $1.53 | $1,023.31 | $1.51 | |||||
Investor Class | 0.55% | $1,000.00 | $1,051.10 | $2.80 | $1,022.07 | $2.76 | |||||
Baird Intermediate Municipal | |||||||||||
Bond Fund | |||||||||||
Institutional Class | 0.30% | $1,000.00 | $1,026.10 | $1.51 | $1,023.31 | $1.51 | |||||
Investor Class | 0.55% | $1,000.00 | $1,024.60 | $2.76 | $1,022.07 | $2.76 | |||||
Baird Aggregate Bond Fund | |||||||||||
Institutional Class | 0.30% | $1,000.00 | $1,038.70 | $1.52 | $1,023.31 | $1.51 | |||||
Investor Class | 0.55% | $1,000.00 | $1,036.50 | $2.78 | $1,022.07 | $2.76 | |||||
Baird Core Plus Bond Fund | |||||||||||
Institutional Class | 0.30% | $1,000.00 | $1,058.50 | $1.53 | $1,023.31 | $1.51 | |||||
Investor Class | 0.55% | $1,000.00 | $1,057.70 | $2.81 | $1,022.07 | $2.76 |
(1) | Expenses are equal to the Fund’s annualized net expense ratio multiplied by the average account value over the period, multiplied by 181 days and divided by 365 to reflect the one-half year period. |
Page 89
Baird Funds, Inc.
Statements of Assets and Liabilities June 30, 2009 (Unaudited) |
Baird | |||||||||||||||||||||
Baird | Baird | Intermediate | Baird | Baird | |||||||||||||||||
Short-Term | Intermediate | Municipal | Aggregate | Core Plus | |||||||||||||||||
Bond Fund | Bond Fund | Bond Fund | Bond Fund | Bond Fund | |||||||||||||||||
ASSETS: | |||||||||||||||||||||
Investments, at value | $ | 479,799,380 | $ | 646,238,935 | $ | 492,241,064 | $ | 1,276,577,977 | $ | 258,228,816 | |||||||||||
(cost $488,711,548; $664,972,598; | |||||||||||||||||||||
$483,308,825; $1,334,468,592; | |||||||||||||||||||||
& $267,459,709, respectively) | |||||||||||||||||||||
Interest receivable | 4,233,485 | 5,519,370 | 5,998,625 | 10,599,404 | 2,581,655 | ||||||||||||||||
Receivable for investments sold or paid down | — | 13,910 | — | 23,616 | 3,350 | ||||||||||||||||
Receivable for Fund shares sold | 2,322,700 | 1,816,617 | 4,201,940 | 7,997,709 | 267,371 | ||||||||||||||||
Total assets | 486,355,565 | 653,588,832 | 502,441,629 | 1,295,198,706 | 261,081,192 | ||||||||||||||||
LIABILITIES: | |||||||||||||||||||||
Payable for collateral received | |||||||||||||||||||||
for securities loaned (See Note 6) | 97,121,530 | 185,115,199 | — | 268,529,246 | 46,573,586 | ||||||||||||||||
Payable for securities purchased | 4,238,994 | 2,989,166 | 1,226,328 | 38,059,904 | — | ||||||||||||||||
Payable for Fund shares repurchased | 9,242,800 | 709,429 | 158,976 | 808,112 | 145,977 | ||||||||||||||||
Payable to Advisor and Distributor | 92,387 | 111,345 | 157,254 | 242,277 | 61,735 | ||||||||||||||||
Payable to the Custodian | 51,911 | 509,938 | — | 981,834 | 174,325 | ||||||||||||||||
Other liabilities | 19,558 | 138,828 | — | 259,285 | 55,799 | ||||||||||||||||
Total liabilities | 110,767,180 | 189,573,905 | 1,542,558 | 308,880,658 | 47,011,422 | ||||||||||||||||
NET ASSETS | $ | 375,588,385 | $ | 464,014,927 | $ | 500,899,071 | $ | 986,318,048 | $ | 214,069,770 | |||||||||||
NET ASSETS CONSIST OF: | |||||||||||||||||||||
Capital stock | $ | 384,258,502 | $ | 480,787,373 | $ | 492,465,229 | $ | 1,040,912,314 | $ | 221,787,272 | |||||||||||
Accumulated undistributed | |||||||||||||||||||||
net investment income | 286,626 | 247,184 | 225,200 | 618,303 | 224,597 | ||||||||||||||||
Accumulated net realized | |||||||||||||||||||||
gain (loss) on investments sold | (44,575 | ) | 1,714,033 | (723,597 | ) | 2,678,046 | 1,288,794 | ||||||||||||||
Net unrealized appreciation (depreciation) | |||||||||||||||||||||
on investments | (8,912,168 | ) | (18,733,663 | ) | 8,932,239 | (57,890,615 | ) | (9,230,893 | ) | ||||||||||||
NET ASSETS | $ | 375,588,385 | $ | 464,014,927 | $ | 500,899,071 | $ | 986,318,048 | $ | 214,069,770 | |||||||||||
INSTITUTIONAL CLASS SHARES | |||||||||||||||||||||
Net Assets | $ | 375,588,385 | $ | 458,225,071 | $ | 375,144,235 | $ | 954,986,749 | $ | 176,839,118 | |||||||||||
Shares outstanding ($0.01 par value, | |||||||||||||||||||||
unlimited shares authorized) | 40,093,665 | 44,681,612 | 33,744,943 | 97,070,398 | 18,263,243 | ||||||||||||||||
Net asset value, offering and | |||||||||||||||||||||
redemption price per share | $ | 9.37 | $ | 10.26 | $ | 11.12 | $ | 9.84 | $ | 9.68 | |||||||||||
INVESTOR CLASS SHARES | |||||||||||||||||||||
Net Assets | $ | 5,789,856 | $ | 125,754,836 | $ | 31,331,299 | $ | 37,230,652 | |||||||||||||
Shares outstanding ($0.01 par value, | |||||||||||||||||||||
unlimited shares authorized) | 546,550 | 11,099,928 | 3,109,930 | 3,735,501 | |||||||||||||||||
Net asset value, offering and | |||||||||||||||||||||
redemption price per share | $ | 10.59 | $ | 11.33 | $ | 10.07 | $ | 9.97 |
The accompanying notes are an integral part of these financial statements.
Page 90
Baird Funds, Inc.
Statements of Operations Period Ended June 30, 2009 (Unaudited) |
Baird | ||||||||||||||||||||
Baird | Baird | Intermediate | Baird | Baird | ||||||||||||||||
Short-Term | Intermediate | Municipal | Aggregate | Core Plus | ||||||||||||||||
Bond Fund | Bond Fund | Bond Fund | Bond Fund | Bond Fund | ||||||||||||||||
INVESTMENT INCOME: | ||||||||||||||||||||
Interest income | $ | 7,906,652 | $ | 11,223,234 | $ | 6,052,312 | $ | 26,692,892 | $ | 7,158,590 | ||||||||||
Income from securities lending (Note 6) | 72,125 | 206,225 | — | 281,261 | 59,134 | |||||||||||||||
Other income | 39,881 | 40,713 | 2,439 | 23,514 | 43,271 | |||||||||||||||
Total investment income | 8,018,658 | 11,470,172 | 6,054,751 | 26,997,667 | 7,260,995 | |||||||||||||||
EXPENSES: | ||||||||||||||||||||
Investment advisory fee | 370,684 | 524,461 | 470,713 | 1,112,914 | 254,678 | |||||||||||||||
Administration fee | 74,137 | 104,893 | 94,143 | 222,583 | 50,936 | |||||||||||||||
Distribution expense – | ||||||||||||||||||||
Investor Class Shares (Note 8) | — | 5,503 | 97,287 | 38,105 | 43,058 | |||||||||||||||
Total expenses | 444,821 | 634,857 | 662,143 | 1,373,602 | 348,672 | |||||||||||||||
NET INVESTMENT INCOME | 7,573,837 | 10,835,315 | 5,392,608 | 25,624,065 | 6,912,323 | |||||||||||||||
REALIZED AND UNREALIZED | ||||||||||||||||||||
GAIN ON INVESTMENTS: | ||||||||||||||||||||
Net realized gain (loss) on investments | (21,814 | ) | 777,738 | (107,633 | ) | 3,068,360 | 841,865 | |||||||||||||
Change in unrealized appreciation/ | ||||||||||||||||||||
depreciation on investments | 4,505,688 | 10,120,659 | 1,550,349 | 6,432,277 | 4,446,267 | |||||||||||||||
Net realized and unrealized | ||||||||||||||||||||
gain on investments | 4,483,874 | 10,898,397 | 1,442,716 | 9,500,637 | 5,288,132 | |||||||||||||||
NET INCREASE IN NET ASSETS | ||||||||||||||||||||
RESULTING FROM OPERATIONS | $ | 12,057,711 | $ | 21,733,712 | $ | 6,835,324 | $ | 35,124,702 | $ | 12,200,455 |
The accompanying notes are an integral part of these financial statements.
Page 91
Baird Funds, Inc.
Statements of Changes in Net Assets |
Baird Short-Term Bond Fund | ||||||||
Six Months Ended | ||||||||
June 30, 2009 | Year Ended | |||||||
(Unaudited) | December 31, 2008 | |||||||
OPERATIONS: | ||||||||
Net investment income | $ | 7,573,837 | $ | 11,305,735 | ||||
Net realized gain (loss) on investments | (21,814 | ) | 217,036 | |||||
Change in unrealized appreciation/depreciation on investments | 4,505,688 | (14,687,311 | ) | |||||
Net increase (decrease) in net assets resulting from operations | 12,057,711 | (3,164,540 | ) | |||||
CAPITAL SHARE TRANSACTIONS: | ||||||||
Proceeds from shares sold | 222,821,579 | 178,053,687 | ||||||
Shares issued to holders in reinvestment of dividends | 6,612,017 | 10,505,667 | ||||||
Cost of shares redeemed | (73,582,535 | ) | (158,184,075 | ) | ||||
Net increase in net assets resulting | ||||||||
from capital share transactions | 155,851,061 | 30,375,279 | ||||||
DISTRIBUTIONS TO | ||||||||
INSTITUTIONAL CLASS SHAREHOLDERS: | ||||||||
From net investment income | (7,319,793 | ) | (11,301,816 | ) | ||||
TOTAL INCREASE IN NET ASSETS | 160,588,979 | 15,908,923 | ||||||
NET ASSETS: | ||||||||
Beginning of period | 214,999,406 | 199,090,483 | ||||||
End of period (including undistributed net investment | ||||||||
income of $286,626 and $32,582, respectively) | $ | 375,588,385 | $ | 214,999,406 |
The accompanying notes are an integral part of these financial statements.
Page 92
Baird Funds, Inc.
Statements of Changes in Net Assets |
Baird Intermediate Bond Fund | ||||||||
Six Months Ended | ||||||||
June 30, 2009 | Year Ended | |||||||
(Unaudited) | December 31, 2008 | |||||||
OPERATIONS: | ||||||||
Net investment income | $ | 10,835,315 | $ | 22,412,911 | ||||
Net realized gain on investments | 777,738 | 3,440,473 | ||||||
Change in unrealized appreciation/depreciation on investments | 10,120,659 | (30,956,520 | ) | |||||
Net increase (decrease) in net assets resulting from operations | 21,733,712 | (5,103,136 | ) | |||||
CAPITAL SHARE TRANSACTIONS: | ||||||||
Proceeds from shares sold | 85,752,167 | 142,640,099 | ||||||
Shares issued to holders in reinvestment of dividends | 8,937,769 | 19,625,331 | ||||||
Cost of shares redeemed | (47,666,097 | ) | (130,271,025 | ) | ||||
Net increase in net assets resulting | ||||||||
from capital share transactions | 47,023,839 | 31,994,405 | ||||||
DISTRIBUTIONS TO | ||||||||
INSTITUTIONAL CLASS SHAREHOLDERS: | ||||||||
From net investment income | (10,570,872 | ) | (22,354,849 | ) | ||||
From net realized gains | — | (26,596 | ) | |||||
Total Distributions | (10,570,872 | ) | (22,381,445 | ) | ||||
DISTRIBUTIONS TO | ||||||||
INVESTOR CLASS SHAREHOLDERS: | ||||||||
From net investment income | (104,452 | ) | (174,810 | ) | ||||
From net realized gains | — | (231 | ) | |||||
Total Distributions | (104,452 | ) | (175,041 | ) | ||||
TOTAL INCREASE IN NET ASSETS | 58,082,227 | 4,334,783 | ||||||
NET ASSETS: | ||||||||
Beginning of period | 405,932,700 | 401,597,917 | ||||||
End of period (including undistributed net investment | ||||||||
income of $247,183 and $87,193, respectively) | $ | 464,014,927 | $ | 405,932,700 |
The accompanying notes are an integral part of these financial statements.
Page 93
Baird Funds, Inc.
Statements of Changes in Net Assets |
Baird Intermediate Municipal Bond Fund | ||||||||
Six Months Ended | ||||||||
June 30, 2009 | Year Ended | |||||||
(Unaudited) | December 31, 2008 | |||||||
OPERATIONS: | ||||||||
Net investment income | $ | 5,392,608 | $ | 5,141,918 | ||||
Net realized loss on investments | (107,633 | ) | (274,006 | ) | ||||
Change in unrealized appreciation/depreciation on investments | 1,550,349 | 5,662,406 | ||||||
Net increase in net assets resulting from operations | 6,835,324 | 10,530,318 | ||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||
Proceeds from shares sold | 333,287,707 | 160,219,164 | ||||||
Shares issued to holders in reinvestment of dividends | 4,516,114 | 4,513,442 | ||||||
Cost of shares redeemed | (82,136,248 | ) | (33,490,109 | ) | ||||
Net increase in net assets resulting | ||||||||
from capital share transactions | 255,667,573 | 131,242,497 | ||||||
DISTRIBUTIONS TO | ||||||||
INSTITUTIONAL CLASS SHAREHOLDERS: | ||||||||
From net investment income | (4,122,434 | ) | (5,091,785 | ) | ||||
DISTRIBUTIONS TO | ||||||||
INVESTOR CLASS SHAREHOLDERS: | ||||||||
From net investment income | (1,044,974 | ) | (97,675 | ) | ||||
TOTAL INCREASE IN NET ASSETS | 257,335,489 | 136,583,355 | ||||||
NET ASSETS: | ||||||||
Beginning of period | 243,563,582 | 106,980,227 | ||||||
End of period (including undistributed net investment | ||||||||
income of $225,200 and $0, respectively) | $ | 500,899,071 | $ | 243,563,582 |
The accompanying notes are an integral part of these financial statements.
Page 94
Baird Funds, Inc.
Statements of Changes in Net Assets |
Baird Aggregate Bond Fund | ||||||||
Six Months Ended | ||||||||
June 30, 2009 | Year Ended | |||||||
(Unaudited) | December 31, 2008 | |||||||
OPERATIONS: | ||||||||
Net investment income | $ | 25,624,065 | $ | 44,829,005 | ||||
Net realized gain on investments | 3,068,360 | 1,031,139 | ||||||
Change in unrealized appreciation/depreciation on investments | 6,432,277 | (67,458,374 | ) | |||||
Net increase (decrease) in net assets resulting from operations | 35,124,702 | (21,598,230 | ) | |||||
CAPITAL SHARE TRANSACTIONS: | ||||||||
Proceeds from shares sold | 226,122,917 | 380,122,590 | ||||||
Shares issued to holders in reinvestment of dividends | 20,535,544 | 36,137,185 | ||||||
Cost of shares redeemed | (142,330,234 | ) | (217,594,354 | ) | ||||
Net increase in net assets resulting | ||||||||
from capital share transactions | 104,328,227 | 198,665,421 | ||||||
DISTRIBUTIONS TO | ||||||||
INSTITUTIONAL CLASS SHAREHOLDERS: | ||||||||
From net investment income | (24,206,145 | ) | (43,763,255 | ) | ||||
DISTRIBUTIONS TO | ||||||||
INVESTOR CLASS SHAREHOLDERS: | ||||||||
From net investment income | (799,617 | ) | (1,376,855 | ) | ||||
TOTAL INCREASE IN NET ASSETS | 114,447,167 | 131,927,081 | ||||||
NET ASSETS: | ||||||||
Beginning of period | 871,870,881 | 739,943,800 | ||||||
End of period (including undistributed net investment | ||||||||
income of $618,303 and $0, respectively) | $ | 986,318,048 | $ | 871,870,881 |
The accompanying notes are an integral part of these financial statements.
Page 95
Baird Funds, Inc.
Statements of Changes in Net Assets |
Baird Core Plus Bond Fund | ||||||||
Six Months Ended | ||||||||
June 30, 2009 | Year Ended | |||||||
(Unaudited) | December 31, 2008 | |||||||
OPERATIONS: | ||||||||
Net investment income | $ | 6,912,323 | $ | 9,185,656 | ||||
Net realized gain on investments | 841,865 | 1,160,853 | ||||||
Change in unrealized appreciation/depreciation on investments | 4,446,267 | (14,240,961 | ) | |||||
Net increase (decrease) in net assets resulting from operations | 12,200,455 | (3,894,452 | ) | |||||
CAPITAL SHARE TRANSACTIONS: | ||||||||
Proceeds from shares sold | 59,731,983 | 134,885,428 | ||||||
Shares issued to holders in reinvestment of dividends | 5,930,870 | 8,307,982 | ||||||
Cost of shares redeemed | (45,672,726 | ) | (57,613,955 | ) | ||||
Net increase in net assets resulting | ||||||||
from capital share transactions | 19,990,127 | 85,579,455 | ||||||
DISTRIBUTIONS TO INSTITUTIONAL CLASS SHAREHOLDERS: | ||||||||
From net investment income | (5,604,397 | ) | (7,991,266 | ) | ||||
From net realized gains | — | (689,704 | ) | |||||
Total Distributions | (5,604,397 | ) | (8,680,970 | ) | ||||
DISTRIBUTIONS TO INVESTOR CLASS SHAREHOLDERS: | ||||||||
From net investment income | (1,083,328 | ) | (1,208,915 | ) | ||||
From net realized gains | — | (123,760 | ) | |||||
Total Distributions | (1,083,328 | ) | (1,332,675 | ) | ||||
TOTAL INCREASE IN NET ASSETS | 25,502,857 | 71,671,358 | ||||||
NET ASSETS: | ||||||||
Beginning of period | 188,566,913 | 116,895,555 | ||||||
End of period (including undistributed net investment | ||||||||
income of $224,597 and $0, respectively) | $ | 214,069,770 | $ | 188,566,913 |
The accompanying notes are an integral part of these financial statements.
Page 96
Baird Funds, Inc.
Financial Highlights |
Baird Short-Term Bond Fund – Institutional Class | ||||||||||||||||||||||||
Six Months | ||||||||||||||||||||||||
Ended | August 31, 2004(1) | |||||||||||||||||||||||
June 30, 2009 | Year Ended December 31, | through | ||||||||||||||||||||||
(Unaudited) | 2008 | 2007 | 2006 | 2005 | December 31, 2004 | |||||||||||||||||||
Per Share Data: | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 9.25 | $ | 9.91 | $ | 9.81 | $ | 9.79 | $ | 9.93 | $ | 10.00 | ||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income | 0.23 | 0.52 | 0.48 | 0.43 | 0.33 | 0.08 | ||||||||||||||||||
Net realized and unrealized | ||||||||||||||||||||||||
gains (losses) on investments | 0.11 | (0.67 | ) | 0.10 | 0.02 | (0.15 | ) | (0.07 | ) | |||||||||||||||
Total from investment operations | 0.34 | (0.15 | ) | 0.58 | 0.45 | 0.18 | 0.01 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||||
Dividends from net investment income | (0.22 | ) | (0.51 | ) | (0.48 | ) | (0.43 | ) | (0.32 | ) | (0.08 | ) | ||||||||||||
Net asset value, end of period | $ | 9.37 | $ | 9.25 | $ | 9.91 | $ | 9.81 | $ | 9.79 | $ | 9.93 | ||||||||||||
Total return | 3.86 | %(2) | (1.79 | )% | 6.08 | % | 4.65 | % | 1.85 | % | 0.10 | %(2) | ||||||||||||
Supplemental data and ratios: | ||||||||||||||||||||||||
Net assets, end of period | $ | 375,588,385 | $ | 214,999,406 | $ | 199,090,483 | $ | 148,604,711 | $ | 97,057,968 | $ | 31,973,000 | ||||||||||||
Ratio of expenses to average net assets | 0.30 | %(3) | 0.30 | % | 0.30 | % | 0.30 | % | 0.30 | % | 0.30 | %(3) | ||||||||||||
Ratio of net investment income | ||||||||||||||||||||||||
to average net assets | 5.11 | %(3) | 5.01 | % | 5.00 | % | 4.48 | % | 3.52 | % | 2.60 | %(3) | ||||||||||||
Portfolio turnover rate(4) | 32.3 | %(2) | 98.5 | % | 36.6 | % | 41.1 | % | 31.8 | % | 16.7 | %(2) |
(1) | Commencement of operations. |
(2) | Not annualized. |
(3) | Annualized. |
(4) | Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. |
The accompanying notes are an integral part of these financial statements.
Page 97
Baird Funds, Inc.
Financial Highlights |
Baird Intermediate Bond Fund – Institutional Class | ||||||||||||||||||||||||
Six Months | ||||||||||||||||||||||||
Ended | ||||||||||||||||||||||||
June 30, 2009 | Year Ended December 31, | |||||||||||||||||||||||
(Unaudited) | 2008 | 2007 | 2006 | 2005 | 2004 | |||||||||||||||||||
Per Share Data: | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 10.00 | $ | 10.62 | $ | 10.52 | $ | 10.55 | $ | 10.83 | $ | 10.88 | ||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income | 0.25 | (1) | 0.55 | 0.54 | 0.51 | 0.46 | 0.47 | (1) | ||||||||||||||||
Net realized and unrealized | ||||||||||||||||||||||||
gains (losses) on investments | 0.26 | (0.64 | ) | 0.10 | (0.03 | ) | (0.27 | ) | (0.05 | ) | ||||||||||||||
Total from investment operations | 0.51 | (0.09 | ) | 0.64 | 0.48 | 0.19 | 0.42 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||||
Dividends from net investment income | (0.25 | ) | (0.53 | ) | (0.54 | ) | (0.51 | ) | (0.47 | ) | (0.47 | ) | ||||||||||||
Distributions from net realized gains | — | — | — | — | — | (0.00 | )(2) | |||||||||||||||||
Total distributions | (0.25 | ) | (0.53 | ) | (0.54 | ) | (0.51 | ) | (0.47 | ) | (0.47 | ) | ||||||||||||
Net asset value, end of period | $ | 10.26 | $ | 10.00 | $ | 10.62 | $ | 10.52 | $ | 10.55 | $ | 10.83 | ||||||||||||
Total return | 5.30 | %(3) | (0.91 | )% | 6.24 | % | 4.70 | % | 1.77 | % | 3.91 | % | ||||||||||||
Supplemental data and ratios: | ||||||||||||||||||||||||
Net assets, end of period | $ | 458,225,071 | $ | 401,914,872 | $ | 398,321,566 | $ | 326,835,399 | $ | 231,800,807 | $ | 191,563,699 | ||||||||||||
Ratio of expenses to average net assets | 0.30 | %(4) | 0.30 | % | 0.30 | % | 0.30 | % | 0.30 | % | 0.30 | % | ||||||||||||
Ratio of net investment income | ||||||||||||||||||||||||
to average net assets | 5.17 | %(4) | 5.14 | % | 5.13 | % | 4.90 | % | 4.34 | % | 4.32 | % | ||||||||||||
Portfolio turnover rate(5) | 16.7 | %(3) | 32.9 | % | 42.5 | % | 44.8 | % | 42.1 | % | 44.8 | % |
(1) | Calculated using average shares outstanding during the period. |
(2) | Amount is less than $0.01. |
(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. |
The accompanying notes are an integral part of these financial statements.
Page 98
Baird Funds, Inc.
Financial Highlights |
Baird Intermediate Bond Fund – Investor Class | ||||||||||||||||||||||||
Six Months | ||||||||||||||||||||||||
Ended | ||||||||||||||||||||||||
June 30, 2009 | Year Ended December 31, | |||||||||||||||||||||||
(Unaudited) | 2008 | 2007 | 2006 | 2005 | 2004 | |||||||||||||||||||
Per Share Data: | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 10.32 | $ | 10.96 | $ | 10.85 | $ | 10.86 | $ | 11.13 | $ | 11.17 | ||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income | 0.25 | (1) | 0.52 | 0.52 | 0.50 | (1) | 0.45 | 0.45 | (1) | |||||||||||||||
Net realized and unrealized | ||||||||||||||||||||||||
gains (losses) on investments | 0.26 | (0.65 | ) | 0.10 | (0.03 | ) | (0.28 | ) | (0.05 | ) | ||||||||||||||
Total from investment operations | 0.51 | (0.13 | ) | 0.62 | 0.47 | 0.17 | 0.40 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||||
Dividends from net investment income | (0.24 | ) | (0.51 | ) | (0.51 | ) | (0.48 | ) | (0.44 | ) | (0.44 | ) | ||||||||||||
Distributions from net realized gains | — | — | — | — | — | (0.00 | )(2) | |||||||||||||||||
Total distributions | (0.24 | ) | (0.51 | ) | (0.51 | ) | (0.48 | ) | (0.44 | ) | (0.44 | ) | ||||||||||||
Net asset value, end of period | $ | 10.59 | $ | 10.32 | $ | 10.96 | $ | 10.85 | $ | 10.86 | $ | 11.13 | ||||||||||||
Total return | 5.11 | %(3) | (1.31 | )% | 5.89 | % | 4.47 | % | 1.56 | % | 3.65 | % | ||||||||||||
Supplemental data and ratios: | ||||||||||||||||||||||||
Net assets, end of period | $ | 5,789,856 | $ | 4,017,828 | $ | 3,276,351 | $ | 1,207,214 | $ | 2,829,659 | $ | 3,012,328 | ||||||||||||
Ratio of expenses to average net assets | 0.55 | %(4) | 0.55 | % | 0.55 | % | 0.55 | % | 0.55 | % | 0.55 | % | ||||||||||||
Ratio of net investment income | ||||||||||||||||||||||||
to average net assets | 4.92 | %(4) | 4.89 | % | 4.88 | % | 4.65 | % | 4.09 | % | 4.07 | % | ||||||||||||
Portfolio turnover rate(5) | 16.7 | %(3) | 32.9 | % | 42.5 | % | 44.8 | % | 42.1 | % | 44.8 | % |
(1) | Calculated using average shares outstanding during the period. |
(2) | Amount is less than $0.01. |
(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. |
The accompanying notes are an integral part of these financial statements.
Page 99
Baird Funds, Inc.
Financial Highlights |
Baird Intermediate Municipal Bond Fund – Institutional Class | ||||||||||||||||||||||||
Six Months | ||||||||||||||||||||||||
Ended | ||||||||||||||||||||||||
June 30, 2009 | Year Ended December 31, | |||||||||||||||||||||||
(Unaudited) | 2008 | 2007 | 2006 | 2005 | 2004 | |||||||||||||||||||
Per Share Data: | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 10.98 | $ | 10.69 | $ | 10.55 | $ | 10.56 | $ | 10.81 | $ | 10.91 | ||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income(1) | 0.16 | 0.39 | 0.37 | 0.39 | 0.39 | 0.40 | ||||||||||||||||||
Net realized and unrealized | ||||||||||||||||||||||||
gains (losses) on investments | 0.13 | 0.28 | 0.14 | (0.01 | ) | (0.25 | ) | (0.11 | ) | |||||||||||||||
Total from investment operations | 0.29 | 0.67 | 0.51 | 0.38 | 0.14 | 0.29 | ||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||
Dividends from net investment income | (0.15 | ) | (0.38 | ) | (0.37 | ) | (0.39 | ) | (0.39 | ) | (0.39 | ) | ||||||||||||
Net asset value, end of period | $ | 11.12 | $ | 10.98 | $ | 10.69 | $ | 10.55 | $ | 10.56 | $ | 10.81 | ||||||||||||
Total return | 2.61 | %(2) | 6.37 | % | 4.93 | % | 3.69 | % | 1.33 | % | 2.69 | % | ||||||||||||
Supplemental data and ratios: | ||||||||||||||||||||||||
Net assets, end of period | $ | 375,144,235 | $ | 226,148,164 | $ | 106,583,763 | $ | 64,932,629 | $ | 53,831,848 | $ | 36,889,211 | ||||||||||||
Ratio of expenses to average net assets | 0.30 | %(3) | 0.30 | % | 0.30 | % | 0.30 | % | 0.30 | % | 0.30 | % | ||||||||||||
Ratio of net investment income | ||||||||||||||||||||||||
to average net assets | 2.92 | %(3) | 3.58 | % | 3.44 | % | 3.72 | % | 3.64 | % | 3.70 | % | ||||||||||||
Portfolio turnover rate(4) | 0.5 | %(2) | 0.9 | % | 5.6 | % | 25.1 | % | 13.7 | % | 4.2 | % |
(1) | Calculated using average shares outstanding during the period. |
(2) | Not annualized. |
(3) | Annualized. |
(4) | Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. |
The accompanying notes are an integral part of these financial statements.
Page 100
Baird Funds, Inc.
Financial Highlights |
Baird Intermediate Municipal Bond Fund – Investor Class | ||||||||||||||||||||||||
Six Months | ||||||||||||||||||||||||
Ended | ||||||||||||||||||||||||
June 30, 2009 | Year Ended December 31, | |||||||||||||||||||||||
(Unaudited) | 2008 | 2007 | 2006 | 2005 | 2004 | |||||||||||||||||||
Per Share Data: | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 11.19 | $ | 10.90 | $ | 10.75 | $ | 10.75 | $ | 10.99 | $ | 11.09 | ||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income(1) | 0.15 | 0.36 | 0.35 | 0.37 | 0.37 | 0.38 | ||||||||||||||||||
Net realized and unrealized | ||||||||||||||||||||||||
gains (losses) on investments | 0.13 | 0.28 | 0.14 | (0.01 | ) | (0.25 | ) | (0.12 | ) | |||||||||||||||
Total from investment operations | 0.28 | 0.64 | 0.49 | 0.36 | 0.12 | 0.26 | ||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||
Dividends from net investment income | (0.14 | ) | (0.35 | ) | (0.34 | ) | (0.36 | ) | (0.36 | ) | (0.36 | ) | ||||||||||||
Net asset value, end of period | $ | 11.33 | $ | 11.19 | $ | 10.90 | $ | 10.75 | $ | 10.75 | $ | 10.99 | ||||||||||||
Total return | 2.46 | %(2) | 6.02 | % | 4.68 | % | 3.44 | % | 1.13 | % | 2.40 | % | ||||||||||||
Supplemental data and ratios: | ||||||||||||||||||||||||
Net assets, end of period | $ | 125,754,836 | $ | 17,415,418 | $ | 396,464 | $ | 544,878 | $ | 1,491,666 | $ | 4,611,766 | ||||||||||||
Ratio of expenses to average net assets | 0.55 | %(3) | 0.55 | % | 0.55 | % | 0.55 | % | 0.55 | % | 0.55 | % | ||||||||||||
Ratio of net investment income | ||||||||||||||||||||||||
to average net assets | 2.67 | %(3) | 3.33 | % | 3.19 | % | 3.47 | % | 3.39 | % | 3.45 | % | ||||||||||||
Portfolio turnover rate(4) | 0.5 | %(2) | 0.9 | % | 5.6 | % | 25.1 | % | 13.7 | % | 4.2 | % |
(1) | Calculated using average shares outstanding during the period. |
(2) | Not annualized. |
(3) | Annualized. |
(4) | Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. |
The accompanying notes are an integral part of these financial statements.
Page 101
Baird Funds, Inc.
Financial Highlights |
Baird Aggregate Bond Fund – Institutional Class | ||||||||||||||||||||||||
Six Months | ||||||||||||||||||||||||
Ended | ||||||||||||||||||||||||
June 30, 2009 | Year Ended December 31, | |||||||||||||||||||||||
(Unaudited) | 2008 | 2007 | 2006 | 2005 | 2004 | |||||||||||||||||||
Per Share Data: | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 9.74 | $ | 10.54 | $ | 10.51 | $ | 10.54 | $ | 10.74 | $ | 10.71 | ||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income | 0.27 | (1) | 0.56 | 0.54 | 0.52 | 0.49 | (1) | 0.49 | (1) | |||||||||||||||
Net realized and unrealized | ||||||||||||||||||||||||
gains (losses) on investments | 0.10 | (0.81 | ) | 0.03 | (0.03 | ) | (0.19 | ) | 0.07 | |||||||||||||||
Total from investment operations | 0.37 | (0.25 | ) | 0.57 | 0.49 | 0.30 | 0.56 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||||
Dividends from net investment income | (0.27 | ) | (0.55 | ) | (0.54 | ) | (0.52 | ) | (0.49 | ) | (0.50 | ) | ||||||||||||
Distributions from net realized gains | — | — | — | (0.00 | )(2) | (0.01 | ) | (0.03 | ) | |||||||||||||||
Total distributions | (0.27 | ) | (0.55 | ) | (0.54 | ) | (0.52 | ) | (0.50 | ) | (0.53 | ) | ||||||||||||
Net asset value, end of period | $ | 9.84 | $ | 9.74 | $ | 10.54 | $ | 10.51 | $ | 10.54 | $ | 10.74 | ||||||||||||
Total return | 3.87 | %(3) | (2.36 | )% | 5.61 | % | 4.88 | % | 2.85 | % | 5.30 | % | ||||||||||||
Supplemental data and ratios: | ||||||||||||||||||||||||
Net assets, end of period | $ | 954,986,749 | $ | 842,724,670 | $ | 725,580,384 | $ | 334,907,855 | $ | 227,132,399 | $ | 115,382,862 | ||||||||||||
Ratio of expenses to average net assets | 0.30 | %(4) | 0.30 | % | 0.30 | % | 0.30 | % | 0.30 | % | 0.30 | % | ||||||||||||
Ratio of net investment income | ||||||||||||||||||||||||
to average net assets | 5.76 | %(4) | 5.46 | % | 5.37 | % | 5.11 | % | 4.56 | % | 4.58 | % | ||||||||||||
Portfolio turnover rate(5) | 21.2 | %(3) | 21.9 | % | 33.6 | % | 52.4 | % | 46.0 | % | 72.6 | % |
(1) | Calculated using average shares outstanding during the period. |
(2) | Amount is less than ($0.01). |
(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. |
The accompanying notes are an integral part of these financial statements.
Page 102
Baird Funds, Inc.
Financial Highlights |
Baird Aggregate Bond Fund – Investor Class | ||||||||||||||||||||||||
Six Months | ||||||||||||||||||||||||
Ended | ||||||||||||||||||||||||
June 30, 2009 | Year Ended December 31, | |||||||||||||||||||||||
(Unaudited) | 2008 | 2007 | 2006 | 2005 | 2004 | |||||||||||||||||||
Per Share Data: | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 9.97 | $ | 10.78 | $ | 10.73 | $ | 10.75 | $ | 10.95 | $ | 10.88 | ||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income | 0.27 | (1) | 0.52 | 0.53 | 0.50 | 0.47 | (1) | 0.48 | (1) | |||||||||||||||
Net realized and unrealized | ||||||||||||||||||||||||
gains (losses) on investments | 0.09 | (0.81 | ) | 0.04 | (0.02 | ) | (0.19 | ) | 0.07 | |||||||||||||||
Total from investment operations | 0.36 | (0.29 | ) | 0.57 | 0.48 | 0.28 | 0.55 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||||
Dividends from net investment income | (0.26 | ) | (0.52 | ) | (0.52 | ) | (0.50 | ) | (0.47 | ) | (0.45 | ) | ||||||||||||
Distributions from net realized gains | — | — | — | (0.00 | )(2) | (0.01 | ) | (0.03 | ) | |||||||||||||||
Total distributions | (0.26 | ) | (0.52 | ) | (0.52 | ) | (0.50 | ) | (0.48 | ) | (0.48 | ) | ||||||||||||
Net asset value, end of period | $ | 10.07 | $ | 9.97 | $ | 10.78 | $ | 10.73 | $ | 10.75 | $ | 10.95 | ||||||||||||
Total return | 3.65 | %(3) | (2.63 | )% | 5.45 | % | 4.61 | % | 2.54 | % | 5.20 | % | ||||||||||||
Supplemental data and ratios: | ||||||||||||||||||||||||
Net assets, end of period | $ | 31,331,299 | $ | 29,146,211 | $ | 14,363,416 | $ | 1,848,622 | $ | 1,289,926 | $ | 708,858 | ||||||||||||
Ratio of expenses to average net assets | 0.55 | %(4) | 0.55 | % | 0.55 | % | 0.55 | % | 0.55 | % | 0.55 | % | ||||||||||||
Ratio of net investment income | ||||||||||||||||||||||||
to average net assets | 5.51 | %(4) | 5.21 | % | 5.12 | % | 4.86 | % | 4.31 | % | 4.33 | % | ||||||||||||
Portfolio turnover rate(5) | 21.2 | %(3) | 21.9 | % | 33.6 | % | 52.4 | % | 46.0 | % | 72.6 | % |
(1) | Calculated using average shares outstanding during the period. |
(2) | Amount is less than ($0.01). |
(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. |
The accompanying notes are an integral part of these financial statements.
Page 103
Baird Funds, Inc.
Financial Highlights |
Baird Core Plus Bond Fund – Institutional Class | ||||||||||||||||||||||||
Six Months | ||||||||||||||||||||||||
Ended | ||||||||||||||||||||||||
June 30, 2009 | Year Ended December 31, | |||||||||||||||||||||||
(Unaudited) | 2008 | 2007 | 2006 | 2005 | 2004 | |||||||||||||||||||
Per Share Data: | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 9.46 | $ | 10.22 | $ | 10.16 | $ | 10.06 | $ | 10.38 | $ | 10.45 | ||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income | 0.32 | (1) | 0.56 | (1) | 0.54 | (1) | 0.55 | (1) | 0.51 | (1) | 0.54 | |||||||||||||
Net realized and unrealized | ||||||||||||||||||||||||
gains (losses) on investments | 0.21 | (0.73 | ) | 0.05 | 0.09 | (0.28 | ) | 0.10 | ||||||||||||||||
Total from investment operations | 0.53 | (0.17 | ) | 0.59 | 0.64 | 0.23 | 0.64 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||||
Dividends from net investment income | (0.31 | ) | (0.55 | ) | (0.53 | ) | (0.54 | ) | (0.54 | ) | (0.53 | ) | ||||||||||||
Distributions from net realized gains | — | (0.04 | ) | — | — | (0.01 | ) | (0.18 | ) | |||||||||||||||
Total distributions | (0.31 | ) | (0.59 | ) | (0.53 | ) | (0.54 | ) | (0.55 | ) | (0.71 | ) | ||||||||||||
Net asset value, end of period | $ | 9.68 | $ | 9.46 | $ | 10.22 | $ | 10.16 | $ | 10.06 | $ | 10.38 | ||||||||||||
Total return | 5.85 | %(2) | (1.79 | )% | 5.99 | % | 6.58 | % | 2.23 | % | 6.29 | % | ||||||||||||
Supplemental data and ratios: | ||||||||||||||||||||||||
Net assets, end of period | $ | 176,839,118 | $ | 158,983,325 | $ | 114,421,895 | $ | 51,551,017 | $ | 32,173,459 | $ | 32,495,641 | ||||||||||||
Ratio of expenses to average net assets | 0.30 | %(3) | 0.30 | % | 0.30 | % | 0.30 | % | 0.30 | % | 0.30 | % | ||||||||||||
Ratio of net investment income | ||||||||||||||||||||||||
to average net assets | 6.83 | %(3) | 5.61 | % | 5.41 | % | 5.49 | % | 4.92 | % | 4.85 | % | ||||||||||||
Portfolio turnover rate(4) | 22.9 | %(2) | 27.7 | % | 47.4 | % | 62.0 | % | 37.6 | % | 52.5 | % |
(1) | Calculated using average shares outstanding during the period. |
(2) | Not annualized. |
(3) | Annualized. |
(4) | Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. |
The accompanying notes are an integral part of these financial statements.
Page 104
Baird Funds, Inc.
Financial Highlights |
Baird Core Plus Bond Fund – Investor Class | ||||||||||||||||||||||||
Six Months | ||||||||||||||||||||||||
Ended | ||||||||||||||||||||||||
June 30, 2009 | Year Ended December 31, | |||||||||||||||||||||||
(Unaudited) | 2008 | 2007 | 2006 | 2005 | 2004 | |||||||||||||||||||
Per Share Data: | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 9.72 | $ | 10.50 | $ | 10.42 | $ | 10.30 | $ | 10.62 | $ | 10.67 | ||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income | 0.32 | (1) | 0.53 | (1) | 0.53 | (1) | 0.54 | (1) | 0.49 | (1) | 0.53 | |||||||||||||
Net realized and unrealized | ||||||||||||||||||||||||
gains (losses) on investments | 0.23 | (0.74 | ) | 0.06 | 0.09 | (0.29 | ) | 0.10 | ||||||||||||||||
Total from investment operations | 0.55 | (0.21 | ) | 0.59 | 0.63 | 0.20 | 0.63 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||||
Dividends from net investment income | (0.30 | ) | (0.53 | ) | (0.51 | ) | (0.51 | ) | (0.51 | ) | (0.50 | ) | ||||||||||||
Distributions from net realized gains | — | (0.04 | ) | — | — | (0.01 | ) | (0.18 | ) | |||||||||||||||
Total distributions | (0.30 | ) | (0.57 | ) | (0.51 | ) | (0.51 | ) | (0.52 | ) | (0.68 | ) | ||||||||||||
Net asset value, end of period | $ | 9.97 | $ | 9.72 | $ | 10.50 | $ | 10.42 | $ | 10.30 | $ | 10.62 | ||||||||||||
Total return | 5.77 | %(2) | (2.07 | )% | 5.80 | % | 6.34 | % | 1.93 | % | 6.09 | % | ||||||||||||
Supplemental data and ratios: | ||||||||||||||||||||||||
Net assets, end of period | $ | 37,230,652 | $ | 29,583,588 | $ | 2,473,660 | $ | 288,928 | $ | 449,709 | $ | 125,847 | ||||||||||||
Ratio of expenses to average net assets | 0.55 | %(3) | 0.55 | % | 0.55 | % | 0.55 | % | 0.55 | % | 0.55 | % | ||||||||||||
Ratio of net investment income | ||||||||||||||||||||||||
to average net assets | 6.58 | %(3) | 5.36 | % | 5.16 | % | 5.24 | % | 4.67 | % | 4.60 | % | ||||||||||||
Portfolio turnover rate(4) | 22.9 | %(2) | 27.7 | % | 47.4 | % | 62.0 | % | 37.6 | % | 52.5 | % |
(1) | Calculated using average shares outstanding during the period. |
(2) | Not annualized. |
(3) | Annualized. |
(4) | Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. |
The accompanying notes are an integral part of these financial statements.
Page 105
Baird Funds, Inc.
Notes to the Financial Statements June 30, 2009 (Unaudited) |
1. | ORGANIZATION |
Baird Funds, Inc. (the “Corporation”) was incorporated on June 9, 2000 as a Wisconsin corporation and is registered as an open-end investment management company under the Investment Company Act of 1940, as amended (the “1940 Act”). The accompanying financial statements include the Baird Short-Term Bond Fund, Baird Intermediate Bond Fund, Baird Intermediate Municipal Bond Fund, Baird Aggregate Bond Fund and Baird Core Plus Bond Fund (each, a “Fund” and collectively, the “Funds”), five of the eight portfolios comprising the Corporation, each of which is diversified within the meaning of the 1940 Act. Robert W. Baird & Co. Incorporated (“Baird” or the “Advisor”) serves as investment advisor to the Funds.
The Baird Short-Term Bond Fund commenced operations with the sale of Institutional Class Shares on August 31, 2004. The Baird Intermediate Municipal Bond Fund commenced operations with the sale of both Institutional and Investor class shares on March 30, 2001. The Baird Intermediate Bond Fund, Baird Aggregate Bond Fund and Baird Core Plus Bond Fund commenced operations with the sale of both Institutional and Investor class shares on September 29, 2000. The Institutional Class Shares are not subject to a distribution and service (12b-1) fee, while the Investor Class Shares are subject to a distribution and service (12b-1) fee up to 0.25%.
The investment objective of the Baird Short-Term Bond Fund is to provide an annual rate of total return, before Fund expenses, greater than the annual rate of total return of the Barclays Capital 1-3 Year U.S. Government/Credit Bond Index. The Barclays Capital 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 securities with maturities between one and three years.
The investment objective of the Baird Intermediate Bond Fund is to provide an annual rate of total return, before Fund expenses, greater than the annual rate of total return of the Barclays Capital Intermediate U.S. Government/Credit Bond Index. The Barclays Capital Intermediate U.S. Government/Credit Bond Index is an unmanaged, market value weighted index of investment grade, fixed-rate debt, including government and corporate securities, with maturities between one and ten years.
The primary investment objective of the Baird Intermediate Municipal Bond Fund is to provide current income that is substantially exempt from federal income tax. A secondary objective is to provide total return with relatively low volatility of principal.
The investment objective of the Baird Aggregate Bond Fund is to provide an annual rate of total return, before Fund expenses, greater than the annual rate of total return of the Barclays Capital U.S. Aggregate Bond Index. The Barclays Capital 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 securities, with maturities of at least one year.
The investment objective of the Baird Core Plus Bond Fund is to provide an annual rate of total return, before Fund expenses, greater than the annual rate of total return of the Barclays Capital U.S. Universal Bond Index. The Barclays Capital U.S. Universal Bond Index is an unmanaged, market value weighted index of fixed income securities issued in U.S. dollars, including U.S. government and investment grade debt, non-investment grade debt, asset-backed and mortgage-backed securities, Eurobonds, 144A securities and emerging market debt, with maturities of at least one year.
Page 106
Baird Funds, Inc.
Notes to the Financial Statements June 30, 2009 (Unaudited) |
2. | SIGNIFICANT ACCOUNTING POLICIES |
The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of their financial statements. These policies are in conformity with accounting principles generally accepted in the United States of America.
a) | Investment Valuation – Section 2(a)(41) of the 1940 Act, together with the rules and interpretations of the SEC, require the Funds, in computing NAV, to value their portfolio securities using market quotations when they are “readily available.” When market quotations are not readily available (e.g., because there is no regular market quotation for such securities, the market for such security is limited, the validity of quotations is questionable or, for debt securities, IDC does not provide a price), the Board of Directors of the Corporation must value the securities at “fair value determined in good faith.” The Board has delegated such responsibility to the Advisor pursuant to pricing policies and procedures that the Board has adopted and regularly reviews. |
In general, the “fair value” of a security means the amount that the Funds might reasonably expect to receive for the security upon its current sale. Pursuant to Statement of Financial Accounting Standards No. 157 (“SFAS 157), “fair value” means “the price that would be received to sell [a security] in an orderly transaction between market participants at the measurement date.” |
Consistent with Section 2(a)(41) of the 1940 Act and SFAS 157, the Funds price their securities as follows: Debt securities are valued by an independent pricing service using valuation methods that are designed to represent fair value, such as matrix pricing and other analytical pricing models, market transactions and dealer quotations. Debt securities purchased with a remaining maturity of 60 days or less are valued at acquisition cost, plus or minus any amortized discount or premium. Investments in mutual funds are valued at their stated net asset value. Common stocks that are listed on a securities exchange (other than NASDAQ) are valued at the last quoted sales price. Securities traded on NASDAQ are valued at the NASDAQ Official Closing Price. Price information on listed stocks is taken from the exchange where the security is primarily traded. Securities that were not traded on the valuation date, as well as stocks that are not listed on an exchange, including NASDAQ, are valued at the average of the current bid and asked price. Other assets and securities for which no quotations are readily available are valued at fair value as determined in good faith by the Advisor in accordance with procedures approved by the Corporation’s Board of Directors. In accordance with such procedures, the Advisor may use broker quotes or, if the broker quotes are unavailable or deemed to be unreliable, fair value will be determined by a valuation committee of the Advisor. In determining fair value, the valuation committee takes into account all relevant factors and available information. Consequently, the price of the security used by a Fund to calculate its NAV may differ from quoted or published prices for the same security. Fair value pricing involves subjective judgments and there is no single standard for determining a security’s fair value. As a result, different mutual funds could reasonably arrive at a different fair value 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, given the volatility and periodic illiquidity experienced in current markets, the prices determined for any individual security on any given day may vary significantly from the amount that can be obtained in an actual sale of that security, and the Funds’ NAVs may fluctuate significantly from day to day or from period to period. |
Page 107
Baird Funds, Inc.
Notes to the Financial Statements June 30, 2009 (Unaudited) |
2. | SIGNIFICANT ACCOUNTING POLICIES (cont.) |
In September 2006, the Financial Accounting Standards Board (FASB) issued SFAS 157, “Fair Value Measurements.” SFAS 157 defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and expands disclosure about fair value measurements. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. Management has determined that SFAS 157 had no material impact on the Funds’ financial statements. |
In March 2008, Statement of Financial Accounting Standards No. 161, “Disclosures about Derivative Instruments and Hedging Activities” (“SFAS 161”) was issued and is effective for fiscal years beginning after November 15, 2008. SFAS 161 is intended to improve financial reporting for derivative instruments by requiring enhanced disclosure that enables investors to understand how and why an entity uses derivatives, how derivatives are accounted for, and how derivative instruments affect an entity’s results of operations and financial position. Management has determined that SFAS 161 does not have any impact on the Funds’ financial statement disclosures because the Funds have not maintained any positions in derivative instruments or engaged in hedging activities. |
In preparing these financial statements, the Funds have evaluated events and transactions for potential recognition or disclosure through August 28, 2009, the date the financial statements were available to be issued. |
b) | Unregistered Securities – Four of the Funds own certain investment securities which are unregistered and thus restricted with respect to resale. These securities are valued by the Advisor after giving due consideration to pertinent factors including recent private sales, market conditions and the issuer’s financial performance. The value of such securities for the Baird Short-Term Bond, Baird Intermediate Bond, Baird Aggregate Bond and Baird Core Plus Bond Funds were $37,471,979 (9.98% of net assets), $21,293,301 (4.59% of net assets), $56,125,353 (5.69% of net assets) and $7,244,824 (3.38% of net assets), respectively, at June 30, 2009. Restricted securities may be deemed to be liquid as determined by the Advisor based on several factors. All of the restricted securities held by the Funds as of June 30, 2009 consist of securities issued pursuant to Rule 144A under the Securities Act of 1933 and a majority have been deemed to be liquid. A restricted security that is held in each of the Baird Aggregate Bond and Baird Core Plus Bond Funds has been deemed illiquid. The value of the illiquid security is $1,300,000 (0.1% of net assets) in the Baird Aggregate Bond Fund and $200,000 (0.1% of net assets) in the Baird Core Plus Bond Fund. |
c) | Foreign Securities – Foreign securities are defined as securities of issuers that are organized outside the United States. The Funds may invest in U.S. dollar-denominated debt obligations of foreign companies and foreign governments. Investing in securities of foreign companies and foreign governments involves special risks and considerations not typically associated with investing in U.S. companies and the U.S. government. These risks include currency rate fluctuations, political and economic instability and differences in financial reporting standards and less strict regulation of securities markets. Moreover, securities of many foreign companies and foreign governments and their markets may be less liquid and their prices more volatile than those of securities of comparable U.S. companies and the U.S. government. Occasionally, events that affect these values and exchange rates may occur after the close of the exchange on which such securities are traded. If such events materially affect the value of a Funds’ securities, these securities may be valued at their fair value pursuant to procedures adopted by the Board of Directors. |
Page 108
Baird Funds, Inc.
Notes to the Financial Statements June 30, 2009 (Unaudited) |
2. | SIGNIFICANT ACCOUNTING POLICIES (cont.) |
d) | Federal Income Taxes – The Funds intend to continue to qualify as regulated investment companies as provided in subchapter M of the Internal Revenue Code and to distribute substantially all of their taxable income to their shareholders in a manner which results in no tax cost to the Funds. Therefore, no federal income or excise tax provision is recorded. |
Effective June 29, 2007, the Funds adopted Financial Accounting Standards Board (FASB) Interpretation No. 48 (FIN 48), “Accounting for Uncertainty in Income Taxes,” a clarification of FASB Statement No. 109, “Accounting for Income Taxes.” FIN 48 establishes financial reporting rules regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. Management has determined that FIN 48 did not result in any liability to the Funds. |
e) | Allocation of Income and Expenses – Each Fund is charged for those expenses directly attributable to it. Expenses directly attributable to a class of shares, such as Rule 12b-1 distribution fees, are charged to that class of shares. Income, expenses and realized and unrealized gains and losses are allocated to the classes based on their respective net assets. Expenses that are not directly attributable to a Fund are allocated among the Funds in the series in proportion to their assets. |
f) | Distributions to Shareholders – Dividends from net investment income are declared and paid monthly. Distributions of net realized capital gains, if any, are declared and paid at least annually. |
g) | Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
h) | Other – Investment and shareholder transactions are recorded on trade date. The Funds determine the gain or loss realized from investment transactions by comparing the original cost of the security lot sold with the net sales proceeds. Dividend income is recognized on the ex-dividend date and interest income is recognized on an accrual basis. Premiums and discounts on the purchase of securities are amortized/accreted using the effective interest method. Accounting principles generally accepted in the United States of America require that permanent financial reporting and tax differences be reclassified in the capital accounts. |
i) | Guarantees and Indemnifications – In the normal course of business, the Funds enter into contracts with service providers that contain general indemnification clauses. The Funds’ maximum exposure under these arrangements is unknown and would involve future claims against the Funds that have not yet occurred. Based on experience, the Funds would expect the risk of loss to be remote. |
Page 109
Baird Funds, Inc.
Notes to the Financial Statements June 30, 2009 (Unaudited) |
3. | CAPITAL SHARE TRANSACTIONS |
The following table summarizes the capital share transactions of each Fund for the past two fiscal periods:
BAIRD SHORT-TERM BOND FUND
Six Months Ended | Year Ended | ||||||||||||||||
June 30, 2009 | December 31, 2008 | ||||||||||||||||
Institutional Class Shares | Shares | Amount | Institutional Class Shares | Shares | Amount | ||||||||||||
Shares sold | 24,048,225 | $ | 222,821,579 | Shares sold | 18,494,988 | $ | 178,053,687 | ||||||||||
Shares issued to | Shares issued to | ||||||||||||||||
shareholders in | shareholders in | ||||||||||||||||
reinvestment of dividends | 713,433 | 6,612,017 | reinvestment of dividends | 1,090,024 | 10,505,667 | ||||||||||||
Shares redeemed | (7,915,314 | ) | (73,582,535 | ) | Shares redeemed | (16,418,698 | ) | (158,184,075 | ) | ||||||||
Net increase | 16,846,344 | $ | 155,851,061 | Net increase | 3,166,314 | $ | 30,375,279 | ||||||||||
Shares Outstanding: | Shares Outstanding: | ||||||||||||||||
Beginning of period | 23,247,321 | Beginning of period | 20,081,007 | ||||||||||||||
End of period | 40,093,665 | End of period | 23,247,321 |
BAIRD INTERMEDIATE BOND FUND
Six Months Ended | Six Months Ended | ||||||||||||||||
June 30, 2009 | June 30, 2009 | ||||||||||||||||
Institutional Class Shares | Shares | Amount | Investor Class Shares | Shares | Amount | ||||||||||||
Shares sold | 8,260,122 | $ | 83,397,897 | Shares sold | 225,686 | $ | 2,354,270 | ||||||||||
Shares issued to | Shares issued to | ||||||||||||||||
shareholders in | shareholders in | ||||||||||||||||
reinvestment of dividends | 879,367 | 8,836,031 | reinvestment of dividends | 9,794 | 101,738 | ||||||||||||
Shares redeemed | (4,661,533 | ) | (46,846,104 | ) | Shares redeemed | (78,278 | ) | (819,993 | ) | ||||||||
Net increase | 4,477,956 | $ | 45,387,824 | Net increase | 157,202 | $ | 1,636,015 | ||||||||||
Shares Outstanding: | Shares Outstanding: | ||||||||||||||||
Beginning of period | 40,203,656 | Beginning of period | 389,348 | ||||||||||||||
End of period | 44,681,612 | End of period | 546,550 |
Page 110
Baird Funds, Inc.
Notes to the Financial Statements June 30, 2009 (Unaudited) |
3. | CAPITAL SHARE TRANSACTIONS (cont.) |
BAIRD INTERMEDIATE BOND FUND (cont.)
Year Ended | Year Ended | ||||||||||||||||
December 31, 2008 | December 31, 2008 | ||||||||||||||||
Institutional Class Shares | Shares | Amount | Investor Class Shares | Shares | Amount | ||||||||||||
Shares sold | 13,284,667 | $ | 139,033,374 | Shares sold | 344,090 | $ | 3,606,725 | ||||||||||
Shares issued to | Shares issued to | ||||||||||||||||
shareholders in | shareholders in | ||||||||||||||||
reinvestment of dividends | 1,893,754 | 19,500,448 | reinvestment of dividends | 11,882 | 124,883 | ||||||||||||
Shares redeemed | (12,483,629 | ) | (127,498,417 | ) | Shares redeemed | (265,688 | ) | (2,772,608 | ) | ||||||||
Net increase | 2,694,792 | $ | 31,035,405 | Net increase | 90,284 | $ | 959,000 | ||||||||||
Shares Outstanding: | Shares Outstanding: | ||||||||||||||||
Beginning of period | 37,508,864 | Beginning of period | 299,064 | ||||||||||||||
End of period | 40,203,656 | End of period | 389,348 |
BAIRD INTERMEDIATE MUNICIPAL BOND FUND
Six Months Ended | Six Months Ended | ||||||||||||||||
June 30, 2009 | June 30, 2009 | ||||||||||||||||
Institutional Class Shares | Shares | Amount | Investor Class Shares | Shares | Amount | ||||||||||||
Shares sold | 18,465,611 | $ | 206,256,585 | Shares sold | 11,132,358 | $ | 127,031,122 | ||||||||||
Shares issued to | Shares issued to | ||||||||||||||||
shareholders in | shareholders in | ||||||||||||||||
reinvestment of dividends | 314,796 | 3,520,058 | reinvestment of dividends | 87,402 | 996,056 | ||||||||||||
Shares redeemed | (5,630,462 | ) | (63,127,847 | ) | Shares redeemed | (1,676,020 | ) | (19,008,401 | ) | ||||||||
Net increase | 13,149,945 | $ | 146,648,796 | Net increase | 9,543,740 | $ | 109,018,777 | ||||||||||
Shares Outstanding: | Shares Outstanding: | ||||||||||||||||
Beginning of period | 20,594,998 | Beginning of period | 1,556,188 | ||||||||||||||
End of period | 33,744,943 | End of period | 11,099,928 |
Page 111
Baird Funds, Inc.
Notes to the Financial Statements June 30, 2009 (Unaudited) |
3. | CAPITAL SHARE TRANSACTIONS (cont.) |
BAIRD INTERMEDIATE MUNICIPAL BOND FUND (cont.)
Year Ended | Year Ended | ||||||||||||||||
December 31, 2008 | December 31, 2008 | ||||||||||||||||
Institutional Class Shares | Shares | Amount | Investor Class Shares | Shares | Amount | ||||||||||||
Shares sold | 13,276,639 | $ | 142,984,847 | Shares sold | 1,565,048 | $ | 17,234,317 | ||||||||||
Shares issued to | Shares issued to | ||||||||||||||||
shareholders in | shareholders in | ||||||||||||||||
reinvestment of dividends | 411,841 | 4,420,800 | reinvestment of dividends | 8,443 | 92,642 | ||||||||||||
Shares redeemed | (3,060,912 | ) | (32,903,382 | ) | Shares redeemed | (53,682 | ) | (586,727 | ) | ||||||||
Net increase | 10,627,568 | $ | 114,502,265 | Net increase | 1,519,809 | $ | 16,740,232 | ||||||||||
Shares Outstanding: | Shares Outstanding: | ||||||||||||||||
Beginning of period | 9,967,430 | Beginning of period | 36,379 | ||||||||||||||
End of period | 20,594,998 | End of period | 1,556,188 |
BAIRD AGGREGATE BOND FUND
Six Months Ended | Six Months Ended | ||||||||||||||||
June 30, 2009 | June 30, 2009 | ||||||||||||||||
Institutional Class Shares | Shares | Amount | Investor Class Shares | Shares | Amount | ||||||||||||
Shares sold | 22,630,676 | $ | 218,672,298 | Shares sold | 753,459 | $ | 7,450,619 | ||||||||||
Shares issued to | Shares issued to | ||||||||||||||||
shareholders in | shareholders in | ||||||||||||||||
reinvestment of dividends | 2,063,193 | 19,745,246 | reinvestment of dividends | 80,159 | 790,298 | ||||||||||||
Shares redeemed | (14,106,448 | ) | (135,959,884 | ) | Shares redeemed | (646,218 | ) | (6,370,350 | ) | ||||||||
Net increase | 10,587,421 | $ | 102,457,660 | Net increase | 187,400 | $ | 1,870,567 | ||||||||||
Shares Outstanding: | Shares Outstanding: | ||||||||||||||||
Beginning of period | 86,482,977 | Beginning of period | 2,922,530 | ||||||||||||||
End of period | 97,070,398 | End of period | 3,109,930 |
Page 112
Baird Funds, Inc.
Notes to the Financial Statements June 30, 2009 (Unaudited) |
3. | CAPITAL SHARE TRANSACTIONS (cont.) |
BAIRD AGGREGATE BOND FUND (cont.)
Year Ended | Year Ended | ||||||||||||||||
December 31, 2008 | December 31, 2008 | ||||||||||||||||
Institutional Class Shares | Shares | Amount | Investor Class Shares | Shares | Amount | ||||||||||||
Shares sold | 35,060,168 | $ | 355,079,855 | Shares sold | 2,373,145 | $ | 25,042,735 | ||||||||||
Shares issued to | Shares issued to | ||||||||||||||||
shareholders in | shareholders in | ||||||||||||||||
reinvestment of dividends | 3,467,389 | 34,858,275 | reinvestment of dividends | 124,786 | 1,278,910 | ||||||||||||
Shares redeemed | (20,869,352 | ) | (208,295,492 | ) | Shares redeemed | (908,136 | ) | (9,298,862 | ) | ||||||||
Net increase | 17,658,205 | $ | 181,642,638 | Net increase | 1,589,795 | $ | 17,022,783 | ||||||||||
Shares Outstanding: | Shares Outstanding: | ||||||||||||||||
Beginning of period | 68,824,772 | Beginning of period | 1,332,735 | ||||||||||||||
End of period | 86,482,977 | End of period | 2,922,530 |
BAIRD CORE PLUS BOND FUND
Six Months Ended | Six Months Ended | ||||||||||||||||
June 30, 2009 | June 30, 2009 | ||||||||||||||||
Institutional Class Shares | Shares | Amount | Investor Class Shares | Shares | Amount | ||||||||||||
Shares sold | 4,972,287 | $ | 46,848,738 | Shares sold | 1,330,711 | $ | 12,883,245 | ||||||||||
Shares issued to | Shares issued to | ||||||||||||||||
shareholders in | shareholders in | ||||||||||||||||
reinvestment of dividends | 528,552 | 4,986,324 | reinvestment of dividends | 97,416 | 944,546 | ||||||||||||
Shares redeemed | (4,051,744 | ) | (38,548,901 | ) | Shares redeemed | (734,951 | ) | (7,123,825 | ) | ||||||||
Net increase | 1,449,095 | $ | 13,286,161 | Net increase | 693,176 | $ | 6,703,966 | ||||||||||
Shares Outstanding: | Shares Outstanding: | ||||||||||||||||
Beginning of period | 16,814,148 | Beginning of period | 3,042,325 | ||||||||||||||
End of period | 18,263,243 | End of period | 3,735,501 |
Page 113
Baird Funds, Inc.
Notes to the Financial Statements June 30, 2009 (Unaudited) |
3. | CAPITAL SHARE TRANSACTIONS (cont.) |
BAIRD CORE PLUS BOND FUND (cont.)
Year Ended | Year Ended | ||||||||||||||||
December 31, 2008 | December 31, 2008 | ||||||||||||||||
Institutional Class Shares | Shares | Amount | Investor Class Shares | Shares | Amount | ||||||||||||
Shares sold | 9,503,375 | $ | 94,092,004 | Shares sold | 3,970,650 | $ | 40,793,424 | ||||||||||
Shares issued to | Shares issued to | ||||||||||||||||
shareholders in | shareholders in | ||||||||||||||||
reinvestment of dividends | 808,307 | 7,891,717 | reinvestment of dividends | 41,410 | 416,265 | ||||||||||||
Shares redeemed | (4,691,588 | ) | (45,526,757 | ) | Shares redeemed | (1,205,342 | ) | (12,087,198 | ) | ||||||||
Net increase | 5,620,094 | $ | 56,456,964 | Net increase | 2,806,718 | $ | 29,122,491 | ||||||||||
Shares Outstanding: | Shares Outstanding: | ||||||||||||||||
Beginning of period | 11,194,054 | Beginning of period | 235,607 | ||||||||||||||
End of period | 16,814,148 | End of period | 3,042,325 |
4. | INVESTMENT TRANSACTIONS AND INCOME TAX INFORMATION |
During the six months ended June 30, 2009, purchases and sales of investment securities (excluding short-term investments) were as follows:
Baird | ||||||||||||||||||||
Baird | Baird | Intermediate | Baird | Baird | ||||||||||||||||
Short-Term | Intermediate | Municipal | Aggregate | Core Plus | ||||||||||||||||
Bond Fund | Bond Fund | Bond Fund | Bond Fund | Bond Fund | ||||||||||||||||
Purchases: | ||||||||||||||||||||
U.S. Government | $ | 106,241,428 | $ | 70,763,567 | $ | — | $ | 178,338,912 | $ | 22,985,012 | ||||||||||
Other | $ | 128,535,807 | $ | 35,817,197 | $ | 256,451,698 | $ | 114,687,944 | $ | 25,213,269 | ||||||||||
Sales: | ||||||||||||||||||||
U.S. Government | $ | 32,268,660 | $ | 37,461,301 | $ | — | $ | 108,379,123 | $ | 31,296,182 | ||||||||||
Other | $ | 59,749,778 | $ | 32,037,508 | $ | 1,567,000 | $ | 72,973,628 | $ | 14,392,584 |
Page 114
Baird Funds, Inc.
Notes to the Financial Statements June 30, 2009 (Unaudited) |
4. | INVESTMENT TRANSACTIONS AND INCOME TAX INFORMATION (cont.) |
At December 31, 2008, gross unrealized appreciation and depreciation of investments and distributable ordinary income and long-term capital gains for federal tax purposes were as follows:
Baird | ||||||||||||||||||||
Baird | Baird | Intermediate | Baird | Baird | ||||||||||||||||
Short-Term | Intermediate | Municipal | Aggregate | Core Plus | ||||||||||||||||
Bond Fund | Bond Fund | Bond Fund | Bond Fund | Bond Fund | ||||||||||||||||
Cost of Investments | $ | 244,300,776 | $ | 575,074,182 | $ | 229,549,081 | $ | 1,140,078,561 | $ | 245,167,858 | ||||||||||
Gross unrealized appreciation | $ | 1,463,970 | $ | 12,832,844 | $ | 7,639,290 | $ | 29,227,106 | $ | 5,965,601 | ||||||||||
Gross unrealized depreciation | (14,923,827 | ) | (42,009,321 | ) | (262,799 | ) | (94,778,688 | ) | (19,749,447 | ) | ||||||||||
Net unrealized | ||||||||||||||||||||
appreciation/(depreciation) | $ | (13,459,857 | ) | $ | (29,176,477 | ) | $ | 7,376,491 | $ | (65,551,582 | ) | $ | (13,783,846 | ) | ||||||
Undistributed ordinary income* | $ | 68,686 | $ | 403,041 | $ | — | $ | 838,376 | $ | 279,375 | ||||||||||
Undistributed long-term capital gain | — | 942,602 | — | — | 274,239 | |||||||||||||||
Total distributable earnings | $ | 68,686 | $ | 1,345,643 | $ | — | $ | 838,376 | $ | 553,614 | ||||||||||
Other accumulated losses | $ | (16,864 | ) | $ | — | $ | (610,565 | ) | $ | — | $ | — | ||||||||
Total accumulated earnings (losses) | $ | (13,408,035 | ) | $ | (27,830,834 | ) | $ | 6,765,926 | $ | (64,713,206 | ) | $ | (13,230,232 | ) |
* | Undistributed ordinary income includes income from securities lending placed in reserve (see Note 6). |
On the Statements of Assets and Liabilities, the following adjustments were made for permanent tax adjustments:
Undistributed Net | Accumulated Net | Paid In | ||||||||||
Investment Income (Loss) | Realized Gain (Loss) | Capital | ||||||||||
Baird Short-Term Bond Fund | $ | (58,525 | ) | $ | 58,525 | $ | — | |||||
Baird Intermediate Bond Fund | 7,685 | (7,684 | ) | (1 | ) | |||||||
Baird Intermediate Municipal Bond Fund | 15,555 | — | (15,555 | ) | ||||||||
Baird Aggregate Bond Fund | (6,840 | ) | 6,840 | — | ||||||||
Baird Core Plus Bond Fund | (32,675 | ) | 32,674 | 1 |
The permanent differences primarily relate to reclasses from paydown gains and losses from asset backed securities.
Page 115
Baird Funds, Inc.
Notes to the Financial Statements June 30, 2009 (Unaudited) |
4. | INVESTMENT TRANSACTIONS AND INCOME TAX INFORMATION (cont.) |
The tax components of dividends paid during the periods shown below were as follows:
Six Months Ended | Year Ended | |||||||||||||||
June 30, 2009 | December 31, 2008 | |||||||||||||||
Ordinary | Long-Term | Ordinary | Long-Term | |||||||||||||
Income | Capital Gains | Income | Capital Gains | |||||||||||||
Distributions | Distributions | Distributions | Distributions | |||||||||||||
Baird Short-Term Bond Fund | $ | 7,319,793 | $ | — | $ | 11,301,816 | $ | — | ||||||||
Baird Intermediate Bond Fund | $ | 10,675,324 | $ | — | $ | 22,529,659 | $ | 26,827 | ||||||||
Baird Intermediate Municipal Bond Fund | $ | — | $ | — | $ | — | $ | — | ||||||||
Baird Aggregate Bond Fund | $ | 25,005,762 | $ | — | $ | 45,140,110 | $ | — | ||||||||
Baird Core Plus Bond Fund | $ | 6,687,725 | $ | — | $ | 9,954,603 | $ | 59,042 |
For the six month period ended June 30, 2009 and the year ended December 31, 2008, distributions of $5,167,408 and $5,189,460 ($15,555 of which was return of capital), respectively, from the Baird Intermediate Municipal Bond Fund were tax-exempt.
Under the current tax law, capital losses realized after October 31 may be deferred and treated as occurring on the first day of the following fiscal year. For the year ended December 31, 2008, Baird Intermediate Municipal Bond Fund elected to defer capital losses occurring between November 1, 2008 and December 31, 2008 in the amount of $869.
At December 31, 2008, accumulated net realized capital loss carryovers, if any, and the year(s) in which the capital loss carryovers expire were:
Capital Loss Carryover | Year of Expiration | ||||
Baird Short-Term Bond Fund | $16,864 | 2014 | |||
Baird Intermediate Municipal Bond Fund | 6,626 | 2012 | |||
184,660 | 2013 | ||||
51,283 | 2014 | ||||
76,723 | 2015 | ||||
290,404 | 2016 |
To the extent these Funds realize future net capital gains, those gains will be offset by any unused capital loss carryovers. During the year ended December 31, 2008, the Baird Short-Term Bond Fund, the Baird Intermediate Bond Fund and the Baird Aggregate Bond Fund utilized capital loss carryovers of $281,458, $2,424,499, and $661,654, respectively.
5. | INVESTMENT ADVISORY AND OTHER AGREEMENTS |
The Funds have entered into an Investment Advisory Agreement with Baird for the provision of investment advisory services. Pursuant to the Investment Advisory Agreement, the Advisor is entitled to receive a fee, calculated daily and payable monthly, at the annual rate of 0.25% for the Funds as applied to the respective Fund’s average daily net assets. Certain officers of the Advisor are also officers of the Funds.
Page 116
Baird Funds, Inc.
Notes to the Financial Statements June 30, 2009 (Unaudited) |
5. | INVESTMENT ADVISORY AND OTHER AGREEMENTS (cont.) |
The Funds have entered into an Administration Agreement with Baird. Under the Administration Agreement, the Advisor assumes and pays all expenses of the applicable Fund other than the investment advisory fees, fees under the 12b-1 plan, costs related to portfolio securities transactions and extraordinary or non-recurring expenses. Pursuant to the Administration Agreement, the Advisor is entitled to receive a fee, calculated daily and payable monthly, at the annual rate of 0.05% for the Funds as applied to the respective Fund’s average daily net assets.
U.S. Bancorp Fund Services, LLC serves as transfer agent, administrator, and accounting services agent for the Funds. U.S. Bank, N.A. serves as custodian for the Funds.
Baird (the “Distributor”) is the distributor of the Funds pursuant to a distribution agreement.
6. | SECURITIES LENDING |
Each Fund may lend up to one-third of its total assets (including such loans) to borrowers under terms of participation in a securities lending program administered by FAF Advisors, Inc., an affiliate of the Funds’ custodian, transfer agent and administrator. The securities lending agreement requires that loans are collateralized at all times in an amount equal to at least 102% of the market value of any loaned securities at the time of the loan, plus accrued interest.
The Funds receive compensation in the form of fees and earn interest on the cash collateral. The amount of fees depends on a number of factors including the type of security and length of the loan. Each Fund continues to receive interest payments or dividends on the securities loaned during the borrowing period. Each Fund has the right under the terms of the securities lending agreement to recall the securities from the borrower on demand.
As of June 30, 2009, the Baird Short-Term Bond Fund, Baird Intermediate Bond Fund, Baird Aggregate Bond Fund and Baird Core Plus Bond Fund had loaned securities that were collateralized by cash equivalents. The cash collateral is invested by the custodian in accordance with approved investment guidelines. Those guidelines require the cash collateral to be invested in readily marketable, high quality, short-term obligations; however, such investments are subject to risk of payment delays or default on the part of the issuer or counterparty or otherwise may not generate sufficient interest to support the costs associated with securities lending. A Fund could also experience delays in recovering its securities and possible loss of income or value if the borrower fails to return the borrowed securities, although the Funds are indemnified from this risk by contract with the securities lending agent.
As of June 30, 2009, the market value of the securities on loan and payable on collateral due to broker were as follows:
Market Value of | Payable on Collateral | |||||||
Securities on Loan | due to Broker | |||||||
Baird Short-Term Bond Fund | $ | 95,695,823 | $ | 97,121,530 | ||||
Baird Intermediate Bond Fund | 180,745,590 | 185,115,199 | ||||||
Baird Aggregate Bond Fund | 262,296,252 | 268,529,246 | ||||||
Baird Core Plus Bond Fund | 45,847,828 | 46,573,586 |
Page 117
Baird Funds, Inc.
Notes to the Financial Statements June 30, 2009 (Unaudited) |
6. | SECURITIES LENDING (cont.) |
The Funds receive cash as collateral in return for securities lent as part of a securities lending program. The collateral is invested in short-term securities including the Mount Vernon Prime Portfolio (a securities lending trust subject to Rule 2a-7 under the 1940 Act), other money market funds, certificates of deposit, commercial paper, corporate notes, government agency securities and repurchase agreements. The schedules of investments for the Funds include the particular cash collateral holdings as of June 30, 2009. The Funds intend to invest all of the collateral in the Mount Vernon Prime Portfolio once their existing cash collateral holdings mature or are liquidated or otherwise paid down. Currently, the Funds hold two cash collateral investments that are priced at fair value by the Valuation Committee of the Advisor: an interest in Atlantic East Funding Trust, LLC and shares of the Reserve Primary Fund. The interest in Atlantic East Funding Trust, LLC is priced at par based on the underlying market value of the securities owned by the Atlantic East Funding Trust, LLC, amounts payable under an agreement from the Funds’ transfer agent and administrator to cover losses realized by the Funds on this investment (up to a certain amount), and a securities lending income reserve. This price for the Funds' interest in Atlantic East Funding Trust, LLC is reflected in the Funds' Schedules of Investments and is included in the Funds' investments, at value in the Funds' Statements of Assets and Liabilities. The Funds deposited their securities lending income into a reserve account from July 2008 through January 2009, which reserve may be used to cover additional losses by the Funds on their interest in Atlantic East Funding Trust, LLC after applying amounts payable from the Funds’ transfer agent and administrator. As a result of these securities lending income reserves, the Funds did not recognize income from their securities lending activity from July 2008 through January 2009 for financial reporting purposes but are required to recognize and distribute such income for tax purposes. The amounts in the securities lending income reserve at June 30, 2009 are $52,186 for the Baird Short-Term Bond Fund, $508,832 for the Baird Intermediate Bond Fund, $981,849 for the Baird Aggregate Bond Fund, and $174,325 for the Baird Core Plus Bond Fund. These amounts are not included as income from securities lending or as investment income on the Funds' Statements of Operations. Upon the liquidation of the Funds’ interest in Atlantic East Funding Trust, LLC, any excess securities lending income reserves (after applying the reserves and amounts payable from the Funds’ transfer agent and administrator to cover losses) will then be recognized as income to the Funds. The Funds discontinued depositing their securities lending income into a reserve in February 2009. From February 2009 through June 2009, the Funds recognized income from their securities lending activity. Interest income earned on collateral investments and recognized by the Funds during the six months ended June 30, 2009 for the Baird Short-Term Bond Fund, Baird Intermediate Bond Fund, Baird Aggregate Bond Fund, and Baird Core Plus Bond Fund were $72,125, $206,225, $281,261, and $59,134, respectively. Shares of the Reserve Primary Fund are priced at $1.00 per share based on the fair value of the shares of that fund plus an agreement to contribute additional amounts to be applied to those shares by the Funds’ transfer agent and administrator. This price for the Reserve Primary Fund shares is reflected in the Funds' Schedules of Investments and is included in the Funds' investments, at value in the Funds' Statements of Assets and Liabilities.
7. | LINE OF CREDIT |
The Corporation maintains an uncommitted, senior secured line of credit (“LOC”) with U.S. Bank, N.A. (the “Bank”) to provide the Funds a temporary liquidity source to meet unanticipated redemptions. Under the terms of the LOC, borrowings for each Fund are limited to one-third of the total assets (including the amount borrowed) of the respective Fund, or as otherwise indicated within the Funds’ agreement with the Bank. The Bank charges interest at the Bank’s Prime Rate less 1% (weighted average rate of 2.25% for the six months of 2009). For the six months ended June 30, 2009, none of the Funds incurred interest charges on the LOC.
Page 118
Baird Funds, Inc.
Notes to the Financial Statements June 30, 2009 (Unaudited) |
8. | DISTRIBUTION AND SHAREHOLDER SERVICE PLAN |
The Funds have adopted a distribution and shareholder service plan (the “Plan”) pursuant to Rule 12b-1 under the 1940 Act. The Plan allows the Funds to compensate the Distributor for the costs incurred in distributing the Funds’ Investor Class Shares, including amounts paid to brokers or dealers, at an annual rate not to exceed 0.25% of the average daily net assets of the Funds’ Investor Class Shares. The Baird Intermediate Bond, Baird Intermediate Municipal Bond, Baird Aggregate Bond and Baird Core Plus Bond Funds incurred $5,903, $97,287, $38,105 and $43,058, respectively, in fees pursuant to the Plan during the six months ended June 30, 2009.
9. | SUBSEQUENT EVENT |
In July 2009, FAF Advisors, Inc. and its affiliate, the Bank, returned to the Funds fees and income they earned in respect of the Funds’ securities lending and borrowing activity from December 3, 2008 through May 21, 2009 because during that period the Bank may have been deemed to be indirectly affiliated with the Funds. Amounts returned to the Funds are approximately $34,822 for the Baird Short-Term Bond Fund, $166,655 for the Baird Intermediate Bond Fund, $253,079 for the Baird Aggregate Bond Fund, and $52,281 for the Baird Core Plus Bond Fund. The Funds are recognizing as income the securities lending fees returned to the Funds. Interest income returned to the Funds related to their borrowings was recorded as a reduction of the Funds’ current year interest expense, with any excess relating to the prior year recorded to other income. The additional income being recognized by the Funds will be included in the Funds’ regular income distributions.
Page 119
Additional Information
Proxy Voting
A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling toll free, 1-866-44BAIRD, or by accessing the Funds’ website at www.bairdfunds.com; and by accessing the SEC’s website at www.sec.gov.
Each Fund’s proxy voting record for the most recent 12-month period ended June 30, if applicable, is available without charge, upon request, by calling toll free, 1-866-44BAIRD, or by accessing the Funds’ website at www.bairdfunds.com; and by accessing the SEC’s website at www.sec.gov. The Funds generally do not vote proxies because the securities held in their portfolios, consisting of bonds and other fixed-income securities, are not entitled to vote.
Portfolio Holdings Disclosure
The Funds file a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the SEC website at www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-732-0330. The Funds’ Forms N-Q may also be obtained by calling toll-free 1-866-44BAIRD.
Page 120
(This Page Intentionally Left Blank.)
Baird Funds, Inc.
c/o U.S. Bancorp Fund Services, LLC
P.O. Box 701
Milwaukee, WI 53201-0701
1-866-44BAIRD
Board of Directors
G. Frederick Kasten, Jr. (Chairman)
John W. Feldt
Frederick P. Stratton, Jr.
Cory L. Nettles
Marlyn J. Spear
Investment Advisor and Distributor
Robert W. Baird & Co. Incorporated
777 East Wisconsin Avenue
Milwaukee, WI 53202
Administrator and Transfer Agent
U.S. Bancorp Fund Services, LLC
P.O. Box 701
615 East Michigan Street
Milwaukee, WI 53202
Custodian
U.S. Bank, N.A.
1555 N. RiverCenter Drive, Suite 302
Milwaukee, WI 53212
Legal Counsel
Godfrey & Kahn, S.C.
780 North Water Street
Milwaukee, WI 53202
Independent Registered Public Accounting Firm
Grant Thornton LLP
175 West Jackson Boulevard, 13th Floor
Chicago, IL 60604
Semi-Annual Report - Baird Funds
Baird LargeCap Fund
Baird MidCap Fund
TABLE OF CONTENTS
Page | |
Baird LargeCap Fund | 1 |
Baird MidCap Fund | 9 |
Additional Information on Fund Expenses | 17 |
Statements of Assets and Liabilities | 19 |
Statements of Operations | 20 |
Statements of Changes in Net Assets | 21 |
Financial Highlights | 23 |
Notes to the Financial Statements | 27 |
Additional Information | 36 |
This report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.
Cautionary Note on Analyses, Opinions and Outlooks: In this report we offer analyses and opinions on the performance of individual securities, companies, industries, sectors, markets, interest rates and governmental policies, including predictions, forecasts and outlooks regarding possible future events. These can generally be identified as such because the context of the statements may include such words as “believe,” “should,” “will,” “expects,” “anticipates,” “hopes” and words of similar effect. These statements reflect the portfolio managers’ good faith beliefs and judgments and involve risks and uncertainties, including the risk that the portfolio managers’ analyses, opinions and outlooks are or will prove to be inaccurate. It is inherently difficult to correctly assess and explain the performance of particular securities, sectors, markets, interest rate movements, governmental actions or general economic trends and conditions, and many unforeseen factors contribute to the performance of Baird Funds. Investors are, therefore, cautioned not to place undue reliance on subjective judgments contained in this report.
Baird LargeCap Fund
A June 30, 2009 summary of the Fund’s top 10 holdings and equity sector analysis compared to the Russell 1000® Growth Index is shown below.
Top 10 Holdings* | Equity Sector Analysis** | ||
Research In Motion Limited | 3.9% | ||
Iron Mountain Incorporated | 3.0% | ||
Southwestern Energy Company | 2.8% | ||
EMC Corporation | 2.8% | ||
Juniper Networks, Inc. | 2.7% | ||
Corning Incorporated | 2.6% | ||
Kohl’s Corporation | 2.6% | ||
Google, Inc. – Class A | 2.5% | ||
Danaher Corporation | 2.4% | ||
Baxter International, Inc. | 2.4% | ||
Net Assets: | $17,592,967 | ||
Portfolio Turnover Rate: | 33.8% | † | |
Number of Equity Holdings: | 57 | ||
Annualized Portfolio Expense Ratio:*** | |||
INSTITUTIONAL CLASS: | 0.75% | ||
INVESTOR CLASS: | 1.00% | **** | |
* | The Fund’s portfolio composition is subject to change and there is no assurance that the Fund will continue to hold any particular security. Percentages shown relate to the Fund’s total net assets as of June 30, 2009. |
** | Percentages shown in parentheses relate to the Fund’s total equity investments as of June 30, 2009, and may not add up to 100% due to rounding. |
*** | The Advisor has contractually agreed to limit the Fund’s total annual fund operating expenses to 0.75% of average daily net assets for the Institutional Class shares and 1.00% of average daily net assets for the Investor Class shares, at least through April 30, 2010. |
**** | Includes 0.25% 12b-1 fee. |
† | Not annualized. |
Page 1
Baird LargeCap Fund
Average Annual Total Returns
For the Periods Ended June 30, 2009 | One Year | Five Years | Since Inception(1) |
Baird LargeCap Fund – Institutional Class Shares | -26.44% | -3.75% | -4.71% |
Baird LargeCap Fund – Investor Class Shares | -26.60% | -3.96% | -4.95% |
Russell 1000® Growth Index(2) | -24.50% | -1.83% | -6.63% |
(1) | For the period from September 29, 2000 (commencement of operations) through June 30, 2009. |
(2) | The Russell 1000® Growth Index measures the performance of those Russell 1000® companies with higher price-to-book ratios and higher forecasted growth values. The Russell 1000® Index consists of the 1,000 largest companies in the Russell 3000® Index, which in turn is comprised of the 3,000 largest U.S. domiciled publicly traded common stocks by market capitalization. These indices do not reflect any deduction for fees, expenses or taxes. A direct investment in an index is not possible. |
The returns shown in the table above reflect reinvestment of dividends and/or capital gains distributions in additional shares. The returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Past performance does not guarantee future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.
For information about the performance of the Fund as of the most recent month-end, please call 1-866-44BAIRD or visit www.bairdfunds.com. Mutual fund performance changes over time and current performance may be lower or higher than that stated.
Page 2
Baird LargeCap Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Shares | Value | ||||||
COMMON STOCKS – 97.6% | |||||||
Aerospace & Defense – 2.1% | |||||||
8,469 | ITT Industries, Inc. | $ | 376,870 | ||||
Air Freight & Logistics – 2.2% | |||||||
7,457 | C.H. Robinson | ||||||
Worldwide, Inc. | 388,883 | ||||||
Auto Components – 1.1% | |||||||
9,190 | Johnson Controls, Inc. | 199,607 | |||||
Biotechnology – 1.9% | |||||||
2,300 | Cephalon, Inc.* | 130,295 | |||||
4,312 | Gilead Sciences, Inc.* | 201,974 | |||||
332,269 | |||||||
Capital Markets – 4.2% | |||||||
5,394 | Northern Trust Corporation | 289,550 | |||||
4,891 | State Street Corporation | 230,855 | |||||
5,314 | T. Rowe Price Group, Inc. | 221,435 | |||||
741,840 | |||||||
Chemicals – 5.6% | |||||||
10,505 | Ecolab, Inc. | 409,590 | |||||
2,485 | Monsanto Company | 184,735 | |||||
5,563 | Praxair, Inc. | 395,362 | |||||
989,687 | |||||||
Commercial Banks – 1.1% | |||||||
7,675 | Wells Fargo & Company | 186,196 | |||||
Communications Equipment – 9.2% | |||||||
29,023 | Corning Incorporated | 466,109 | |||||
19,800 | Juniper Networks, Inc.* | 467,280 | |||||
9,600 | Research In Motion | ||||||
Limited* f | 682,080 | ||||||
1,615,469 | |||||||
Computers & Peripherals – 4.9% | |||||||
37,256 | EMC Corporation* | 488,053 | |||||
9,675 | Hewlett-Packard Company | 373,939 | |||||
861,992 | |||||||
Diversified Financial Services – 1.8% | |||||||
9,359 | J.P. Morgan Chase & Co. | 319,235 | |||||
Diversified Supply Services – 3.1% | |||||||
18,710 | Iron Mountain | ||||||
Incorporated* | 537,912 | ||||||
Electrical Equipment – 3.6% | |||||||
10,882 | Emerson | ||||||
Electric Company | 352,577 | ||||||
1,733 | First Solar, Inc.* | 280,954 | |||||
633,531 | |||||||
Electronic Equipment & Instruments – 1.3% | |||||||
10,925 | Agilent Technologies, Inc.* | 221,887 | |||||
Energy Equipment & Services – 4.7% | |||||||
8,181 | Cameron International | ||||||
Corporation* | 231,522 | ||||||
3,862 | Schlumberger Limited f | 208,973 | |||||
2,054 | Transocean Inc.* f | 152,592 | |||||
12,300 | Weatherford | ||||||
International Ltd.* f | 240,588 | ||||||
833,675 | |||||||
Food & Staples Retailing – 2.8% | |||||||
4,365 | Costco Wholesale | ||||||
Corporation | 199,481 | ||||||
12,846 | Sysco Corporation | 288,778 | |||||
488,259 | |||||||
Health Care Equipment & Supplies – 3.4% | |||||||
7,916 | Baxter International, Inc. | 419,231 | |||||
18,225 | Boston Scientific | ||||||
Corporation* | 184,802 | ||||||
604,033 | |||||||
Health Care Providers & Services – 1.7% | |||||||
4,375 | Express Scripts, Inc.* | 300,781 | |||||
Hotels, Restaurants & Leisure – 2.2% | |||||||
7,750 | International Game | ||||||
Technology | 123,225 |
The accompanying notes are an integral part of these financial statements.
Page 3
Baird LargeCap Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Shares | Value | ||||||
COMMON STOCKS – 97.6% (cont.) | |||||||
Hotels, Restaurants & Leisure – 2.2% (cont.) | |||||||
7,850 | Yum! Brands, Inc. | $ | 261,719 | ||||
384,944 | |||||||
Internet Software & Services – 2.5% | |||||||
1,049 | Google, Inc. – Class A* | 442,248 | |||||
IT Services – 3.5% | |||||||
5,725 | Infosys Technologies | ||||||
Limited – ADR f | 210,566 | ||||||
24,383 | Western Union Company | 399,881 | |||||
610,447 | |||||||
Life Science Tools & Services – 1.4% | |||||||
5,946 | Thermo Fisher | ||||||
Scientific, Inc.* | 242,418 | ||||||
Machinery – 3.9% | |||||||
6,867 | Danaher Corporation | 423,969 | |||||
7,159 | Illinois Tool Works, Inc. | 267,317 | |||||
691,286 | |||||||
Media – 1.3% | |||||||
9,630 | The Walt Disney Co. | 224,668 | |||||
Metals & Mining – 2.6% | |||||||
4,825 | Freeport-McMoRan | ||||||
Copper & Gold, Inc. | 241,781 | ||||||
2,550 | POSCO – ADR f | 210,808 | |||||
452,589 | |||||||
Multiline Retail – 4.1% | |||||||
10,635 | Kohl’s Corporation* | 454,646 | |||||
6,795 | Target Corporation | 268,199 | |||||
722,845 | |||||||
Oil, Gas & Consumable Fuels – 3.7% | |||||||
3,310 | Anadarko Petroleum | ||||||
Corporation | 150,241 | ||||||
12,900 | Southwestern Energy | ||||||
Company* | 501,165 | ||||||
651,406 | |||||||
Pharmaceutical – 1.1% | |||||||
3,975 | Allergan, Inc. | 189,130 | |||||
Semiconductor & Semiconductor Equipment – 6.4% | |||||||
23,590 | Altera Corporation | 384,045 | |||||
34,700 | Applied Materials, Inc. | 380,659 | |||||
7,632 | Broadcom | ||||||
Corporation – Class A* | 189,197 | ||||||
8,137 | Texas Instruments | ||||||
Incorporated | 173,318 | ||||||
1,127,219 | |||||||
Software – 3.8% | |||||||
13,280 | Adobe Systems, | ||||||
Incorporated* | 375,824 | ||||||
9,311 | Citrix Systems, Inc.* | 296,928 | |||||
672,752 | |||||||
Specialty Retail – 3.0% | |||||||
10,699 | Lowe’s Companies, Inc. | 207,668 | |||||
16,279 | Staples, Inc. | 328,347 | |||||
536,015 | |||||||
Textiles, Apparel & Luxury Goods – 1.3% | |||||||
4,525 | NIKE, Inc. | 234,305 | |||||
Trading Companies & Distributors – 2.1% | |||||||
10,922 | Fastenal Company | 362,283 | |||||
Total Common Stocks | |||||||
(Cost $17,108,297) | 17,176,681 | ||||||
SHORT-TERM INVESTMENTS – 2.6% | |||||||
Money Market Fund – 2.6% | |||||||
447,019 | Short-Term Investment | ||||||
Company Liquid Assets | |||||||
Portfolio – AIM Fund | 447,019 | ||||||
Total Short-Term | |||||||
Investments | |||||||
(Cost $447,019) | 447,019 |
The accompanying notes are an integral part of these financial statements.
Page 4
Baird LargeCap Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
INVESTMENTS PURCHASED | |||||||
WITH CASH PROCEEDS FROM | |||||||
SECURITIES LENDING – 37.1% | |||||||
Commercial Paper – 1.3% | |||||||
$ | 237,930 | Atlantic East | |||||
Funding LLC, | |||||||
3.059%, 03/25/10 † ** | $ | 237,930 | |||||
237,930 | |||||||
Corporate Bond – 0.6% | |||||||
104,269 | Svenska Handelsbanken, | ||||||
4.418%, 08/06/09 f | 104,269 | ||||||
104,269 | |||||||
Shares | |||||||
Investment Companies – 35.2% | |||||||
6,139,732 | Mount Vernon | ||||||
Securities Lending | |||||||
Trust Prime Portfolio | 6,139,732 | ||||||
51,500 | Reserve Primary Fund † ** | 51,500 | |||||
6,191,232 | |||||||
Total Investments Purchased | |||||||
With Cash Proceeds From | |||||||
Securities Lending | |||||||
(Cost $6,533,431) | 6,533,431 | ||||||
Total Investments | |||||||
(Cost $24,088,747) – | |||||||
137.3% | 24,157,131 | ||||||
Liabilities in Excess of | |||||||
Other Assets – (37.3)% | (6,564,164 | ) | |||||
TOTAL NET | |||||||
ASSETS – 100.0% | $ | 17,592,967 |
* | Non-Income Producing |
** | Illiquid Security |
f | Foreign Security |
† | Priced at Fair Value by the Valuation Committee as delegated by the Baird Funds’ Board of Directors |
The accompanying notes are an integral part of these financial statements.
Page 5
Baird LargeCap Fund
SFAS 157 – Summary of Fair Value Exposure at June 30, 2009 (Unaudited) |
As adopted by the Fund, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“SFAS 157”) defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. Under SFAS 157, various inputs are used in determining the value of the Fund’s investments. These inputs are summarized into three broad levels and described below:
Level 1 – | Quoted prices in active markets for identical securities. |
Level 2 – | Other significant observable inputs (including quoted prices for similar securities, quoted prices in inactive markets, dealer indications, interest rates, yield curves, prepayment speeds, credit risk, default rates, inputs corroborated by observable market data, etc.) |
Level 3 – | Significant unobservable inputs (including the Fund’s own assumptions about the assumptions that market participants would use in pricing the security) |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Page 6
Baird LargeCap Fund
SFAS 157 – Summary of Fair Value Exposure at June 30, 2009 (Unaudited) |
The following is a summary of the inputs used to value the Fund’s investments as of June 30, 2009:
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Equity | ||||||||||||||||
Aerospace & Defense | $ | 376,870 | $ | — | $ | — | $ | 376,870 | ||||||||
Air Freight & Logistics | 388,883 | — | — | 388,883 | ||||||||||||
Auto Components | 199,607 | — | — | 199,607 | ||||||||||||
Biotechnology | 332,269 | — | — | 332,269 | ||||||||||||
Capital Markets | 741,840 | — | — | 741,840 | ||||||||||||
Chemicals | 989,687 | — | — | 989,687 | ||||||||||||
Commercial Banks | 186,196 | — | — | 186,196 | ||||||||||||
Communications Equipment | 1,615,469 | — | — | 1,615,469 | ||||||||||||
Computers & Peripherals | 861,992 | — | — | 861,992 | ||||||||||||
Diversified Financial Services | 319,235 | — | — | 319,235 | ||||||||||||
Diversified Supply Services | 537,912 | — | — | 537,912 | ||||||||||||
Electrical Equipment | 633,531 | — | — | 633,531 | ||||||||||||
Electronic Equipment & Instruments | 221,887 | — | — | 221,887 | ||||||||||||
Energy Equipment & Services | 833,675 | — | — | 833,675 | ||||||||||||
Food & Staples Retailing | 488,259 | — | — | 488,259 | ||||||||||||
Health Care Equipment & Supplies | 604,033 | — | — | 604,033 | ||||||||||||
Health Care Providers & Services | 300,781 | — | — | 300,781 | ||||||||||||
Hotels, Restaurants & Leisure | 384,944 | — | — | 384,944 | ||||||||||||
Internet Software & Services | 442,248 | — | — | 442,248 | ||||||||||||
IT Services | 610,447 | — | — | 610,447 | ||||||||||||
Life Science Tools & Services | 242,418 | — | — | 242,418 | ||||||||||||
Machinery | 691,286 | — | — | 691,286 | ||||||||||||
Media | 224,668 | — | — | 224,668 | ||||||||||||
Metals & Mining | 452,589 | — | — | 452,589 | ||||||||||||
Multiline Retail | 722,845 | — | — | 722,845 | ||||||||||||
Oil, Gas & Consumable Fuels | 651,406 | — | — | 651,406 | ||||||||||||
Pharmaceutical | 189,130 | — | — | 189,130 | ||||||||||||
Semiconductor & Semiconductor Equipment | 1,127,219 | — | — | 1,127,219 | ||||||||||||
Software | 672,752 | — | — | 672,752 | ||||||||||||
Specialty Retail | 536,015 | — | — | 536,015 | ||||||||||||
Textiles, Apparel & Luxury Goods | 234,305 | — | — | 234,305 | ||||||||||||
Trading Companies & Distributors | 362,283 | — | — | 362,283 | ||||||||||||
Total Equity | 17,176,681 | — | — | 17,176,681 | ||||||||||||
Short-Term Investments | ||||||||||||||||
Money Market Mutual Funds | 447,019 | — | — | 447,019 | ||||||||||||
Total Short-Term Investments | 447,019 | — | — | 447,019 | ||||||||||||
Investments Purchased with Cash | ||||||||||||||||
Proceeds from Securities Lending | ||||||||||||||||
Commercial Paper | — | 237,930 | — | 237,930 | ||||||||||||
Corporate Bond | — | 104,269 | — | 104,269 | ||||||||||||
Money Market Mutual Funds | 6,139,732 | — | 51,500 | 6,191,232 | ||||||||||||
Total Investments Purchased with | ||||||||||||||||
Cash Proceeds from Securities Lending | 6,139,732 | 342,199 | 51,500 | 6,533,431 | ||||||||||||
Total Investments in Securities | $ | 23,763,432 | $ | 342,199 | $ | 51,500 | $ | 24,157,131 |
Page 7
Baird LargeCap Fund
SFAS 157 – Summary of Fair Value Exposure at June 30, 2009 (Unaudited) |
Level 3 Reconciliation Disclosure
Following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value.
Description | Investments in Securities | |||
Balance as of December 31, 2008 | $ | 109,173 | ||
Accrued discounts/premiums | — | |||
Realized gain (loss) | — | |||
Change in unrealized appreciation (depreciation) | — | |||
Net purchases (sales) | (57,673 | ) | ||
Transfers in and/or out of Level 3* | — | |||
Balance as of June 30, 2009 | $ | 51,500 | ||
Change in unrealized appreciation (depreciation) during | ||||
the year for level 3 investments held at June 30, 2009. | — |
* | The information used in the above reconciliation represents fiscal year to date activity for any investments identified as using Level 3 inputs at either the beginning or end of the current fiscal period. Transfers in or out of Level 3 represents either the beginning value (for transfers in) or ending value (for transfers out) of any security or instrument where a change in the pricing level occurred from the beginning to the end of the period. |
Page 8
Baird MidCap Fund
A June 30, 2009 summary of the Fund’s top 10 holdings and equity sector analysis compared to the Russell Midcap® Growth Index is shown below.
Top 10 Holdings* | Equity Sector Analysis** | ||
Oceaneering International, Inc. | 2.5% | ||
Roper Industries, Inc. | 2.5% | ||
Life Technologies Corporation | 2.3% | ||
Cameron International Corporation | 2.3% | ||
Ecolab, Inc. | 2.3% | ||
Airgas, Inc. | 2.2% | ||
Tractor Supply Company | 2.2% | ||
Fiserv, Inc. | 2.2% | ||
NetApp, Inc. | 2.2% | ||
Alliance Data Systems Corporation | 2.2% | ||
Net Assets: | $22,061,983 | ||
Portfolio Turnover Rate: | 33.6% | † | |
Number of Equity Holdings: | 59 | ||
Annualized Portfolio Expense Ratio:*** | |||
INSTITUTIONAL CLASS: | 0.85% | ||
INVESTOR CLASS: | 1.10% | **** | |
* | The Fund’s portfolio composition is subject to change and there is no assurance that the Fund will continue to hold any particular security. Percentages shown relate to the Fund’s total net assets as of June 30, 2009. |
** | Percentages shown in parentheses relate to the Fund’s total equity investments as of June 30, 2009, and may not add up to 100% due to rounding. |
*** | The Advisor has contractually agreed to limit the Fund’s total annual fund operating expenses to 0.85% of average daily net assets for the Institutional Class shares and 1.10% of average daily net assets for the Investor Class shares, at least through April 30, 2010. |
**** | Includes 0.25% 12b-1 fee. |
† | Not annualized. |
Page 9
Baird MidCap Fund
Average Annual Total Returns
For the Periods Ended June 30, 2009 | One Year | Five Years | Since Inception(1) |
Baird MidCap Fund – Institutional Class Shares | -23.77% | -1.57% | -0.49% |
Baird MidCap Fund – Investor Class Shares | -23.93% | -1.79% | -0.71% |
Russell Midcap® Growth Index(2) | -30.33% | -0.44% | -2.10% |
(1) | For the period from December 29, 2000 (commencement of operations) through June 30, 2009. |
(2) | The Russell Midcap® Growth Index measures the performance of those Russell Midcap® Index companies with higher price-to-book ratios and higher forecasted growth values. The Russell Midcap® Index consists of the 800 smallest companies in the Russell 1000® Index, which represent approximately 27% of the total market capitalization of the Russell 1000® Index. The Russell 1000® Index consists of the largest companies in the Russell 3000® Index, which in turn is comprised of the 3,000 largest U.S. domiciled publicly traded common stocks by market capitalization. These indices do not reflect any deduction for fees, expenses or taxes. A direct investment in an index is not possible. |
The returns shown in the table above reflect reinvestment of dividends and/or capital gains distributions in additional shares. The returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Past performance does not guarantee future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.
For information about the performance of the Fund as of the most recent month-end, please call 1-866-44BAIRD or visit www.bairdfunds.com. Mutual fund performance changes over time and current performance may be lower or higher than that stated.
Page 10
Baird MidCap Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Shares | Value | ||||||
COMMON STOCKS – 97.6% | |||||||
Air Freight & Logistics – 1.1% | |||||||
7,104 | Expeditors International | ||||||
of Washington, Inc. | $ | 236,847 | |||||
Auto Components – 1.0% | |||||||
10,525 | Johnson Controls, Inc. | 228,603 | |||||
Biotechnology – 2.0% | |||||||
7,682 | Cephalon, Inc.* | 435,185 | |||||
Capital Markets – 3.8% | |||||||
12,806 | Eaton Vance Corporation | 342,561 | |||||
3,588 | Greenhill & Co., Inc. | 259,089 | |||||
5,970 | T. Rowe Price Group, Inc. | 248,770 | |||||
850,420 | |||||||
Chemicals – 4.5% | |||||||
12,033 | Airgas, Inc. | 487,697 | |||||
12,807 | Ecolab, Inc. | 499,345 | |||||
987,042 | |||||||
Commercial Banks – 1.7% | |||||||
10,688 | PrivateBancorp, Inc. | 237,701 | |||||
12,782 | Zions Bancorporation | 147,760 | |||||
385,461 | |||||||
Commercial Services & Supplies – 1.4% | |||||||
5,815 | Stericycle, Inc.* | 299,647 | |||||
Communications Equipment – 1.6% | |||||||
10,355 | F5 Networks, Inc.* | 358,180 | |||||
Computers & Peripherals – 2.2% | |||||||
24,124 | NetApp, Inc.* | 475,725 | |||||
Construction & Engineering – 0.9% | |||||||
8,848 | Foster Wheeler Ltd* f | 210,140 | |||||
Containers & Packaging – 2.1% | |||||||
13,795 | AptarGroup, Inc. | 465,857 | |||||
Distributors – 2.0% | |||||||
26,325 | LKQ Corporation* | 433,046 | |||||
Diversified Supply Services – 1.6% | |||||||
12,008 | Iron Mountain | ||||||
Incorporated* | 345,230 | ||||||
Electrical Equipment – 2.5% | |||||||
12,152 | Roper Industries, Inc. | 550,607 | |||||
Electronic Component – 1.8% | |||||||
10,895 | Dolby Laboratories, Inc.* | 406,166 | |||||
Energy Equipment & Services – 6.6% | |||||||
17,999 | Cameron International | ||||||
Corporation* | 509,372 | ||||||
12,330 | Oceaneering | ||||||
International, Inc.* | 557,316 | ||||||
14,780 | Smith International, Inc. | 380,585 | |||||
1,447,273 | |||||||
Food Products – 2.8% | |||||||
17,925 | Hain Celestial Group Inc.* | 279,809 | |||||
10,467 | McCormick & Co, | ||||||
Incorporated | 340,492 | ||||||
620,301 | |||||||
Health Care Equipment & Supplies – 2.8% | |||||||
4,925 | IDEXX Laboratories, Inc.* | 227,535 | |||||
5,375 | St. Jude Medical, Inc.* | 220,913 | |||||
6,200 | Thoratec Corporation* | 166,036 | |||||
614,484 | |||||||
Health Care Providers & Services – 1.1% | |||||||
15,025 | Allscripts-Misys | ||||||
Healthcare Solutions, Inc. | 238,296 | ||||||
Health Care Technology – 1.6% | |||||||
18,725 | MedAssets Inc.* | 364,201 | |||||
Hotels Restaurants & Leisure – 4.3% | |||||||
9,450 | Buffalo Wild Wings Inc.* | 307,314 | |||||
17,275 | Burger King Holdings Inc. | 298,339 | |||||
10,650 | WMS Industries Inc.* | 335,582 | |||||
941,235 | |||||||
Internet Software & Services – 1.9% | |||||||
21,517 | Akamai | ||||||
Technologies, Inc.* | 412,696 |
The accompanying notes are an integral part of these financial statements.
Page 11
Baird MidCap Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Shares | Value | ||||||
COMMON STOCKS – 97.6% (cont.) | |||||||
IT Services – 7.7% | |||||||
11,544 | Alliance Data | ||||||
Systems Corporation* | $ | 475,497 | |||||
10,549 | Fiserv, Inc.* | 482,089 | |||||
10,321 | Hewitt Associates, | ||||||
Inc. – Class A* | 307,360 | ||||||
17,160 | Paychex, Inc. | 432,432 | |||||
1,697,378 | |||||||
Life Sciences Tools & Services – 5.8% | |||||||
20,425 | ICON PLC – ADR f | 440,772 | |||||
12,300 | Life Technologies | ||||||
Corporation* | 513,156 | ||||||
4,350 | Mettler-Toledo | ||||||
International Inc.* | 335,603 | ||||||
1,289,531 | |||||||
Machinery – 7.2% | |||||||
11,870 | Bucyrus International, | ||||||
Inc. – Class A | 339,007 | ||||||
15,553 | Harsco Corporation | 440,150 | |||||
18,475 | IDEX Corporation | 453,931 | |||||
11,074 | Wabtec Corporation | 356,251 | |||||
1,589,339 | |||||||
Media – 1.9% | |||||||
27,970 | Lamar Advertising | ||||||
Co. – Class A* | 427,102 | ||||||
Oil & Gas – 1.9% | |||||||
17,225 | Goodrich Petroleum | ||||||
Corporation* | 423,563 | ||||||
Road & Rail – 1.1% | |||||||
7,995 | J.B. Hunt Transport | ||||||
Services, Inc. | 244,087 | ||||||
Semiconductor & Semiconductor Equipment – 5.6% | |||||||
22,425 | Altera Corporation | 365,079 | |||||
19,188 | Microchip Technology | ||||||
Incorporated | 432,689 | ||||||
17,900 | Varian Semiconductor | ||||||
Equipment Associates, Inc.* | 429,421 | ||||||
1,227,189 | |||||||
Software – 3.3% | |||||||
14,589 | Citrix Systems, Inc.* | 465,243 | |||||
6,900 | Salesforce.com, Inc.* | 263,373 | |||||
728,616 | |||||||
Specialty Retail – 7.0% | |||||||
21,906 | Dick’s Sporting | ||||||
Goods, Inc.* | 376,783 | ||||||
19,620 | PetSmart, Inc. | 421,045 | |||||
11,700 | Tractor Supply Company* | 483,444 | |||||
12,650 | Urban Outfitters, Inc.* | 264,006 | |||||
1,545,278 | |||||||
Textiles, Apparel & Luxury Goods – 1.8% | |||||||
13,702 | Phillips-Van Heusen | ||||||
Corporation | 393,110 | ||||||
Trading Companies & Distributors – 3.0% | |||||||
12,151 | Fastenal Company | 403,048 | |||||
5,275 | Watsco, Inc. | 258,106 | |||||
661,154 | |||||||
Total Common Stocks | |||||||
(Cost $22,559,079) | 21,532,989 | ||||||
SHORT-TERM INVESTMENTS – 2.8% | |||||||
Money Market Fund – 2.8% | |||||||
602,448 | Short-Term Investment | ||||||
Company Liquid Assets | |||||||
Portfolio – AIM Fund | 602,448 | ||||||
Total Short-Term | |||||||
Investments | |||||||
(Cost $602,448) | 602,448 |
The accompanying notes are an integral part of these financial statements.
Page 12
Baird MidCap Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Principal | |||||||
Amount | Value | ||||||
INVESTMENTS PURCHASED | |||||||
WITH CASH PROCEEDS FROM | |||||||
SECURITIES LENDING – 37.3% | |||||||
Commercial Paper – 1.5% | |||||||
$ | 334,935 | Atlantic East Funding LLC, | |||||
3.059%, 03/25/10 † ** | $ | 334,935 | |||||
334,935 | |||||||
Corporate Bond – 0.6% | |||||||
131,137 | Svenska Handelsbanken, | ||||||
4.418%, 08/06/09 f | 131,137 | ||||||
131,137 | |||||||
Shares | |||||||
Investment Companies – 35.2% | |||||||
7,721,851 | Mount Vernon | ||||||
Securities Lending | |||||||
Trust Prime Portfolio | 7,721,851 | ||||||
50,233 | Reserve Primary Fund † ** | 50,233 | |||||
7,772,084 | |||||||
Total Investments Purchased | |||||||
With Cash Proceeds From | |||||||
Securities Lending | |||||||
(Cost $8,238,156) | 8,238,156 | ||||||
Total Investments | |||||||
(Cost $31,399,683) – | |||||||
137.7% | 30,373,593 | ||||||
Liabilities in Excess of | |||||||
Other Assets – (37.7)% | (8,311,610 | ) | |||||
TOTAL NET | |||||||
ASSETS – 100.0% | $ | 22,061,983 |
* | Non-Income Producing |
** | Illiquid Security |
f | Foreign Security |
† | Priced at Fair Value by the Valuation Committee as delegated by the Baird Funds’ Board of Directors |
The accompanying notes are an integral part of these financial statements.
Page 13
Baird MidCap Fund
SFAS 157 – Summary of Fair Value Exposure at June 30, 2009 (Unaudited) |
As adopted by the Fund, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“SFAS 157”) defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. Under SFAS 157, various inputs are used in determining the value of the Fund’s investments. These inputs are summarized into three broad levels and described below:
Level 1 – | Quoted prices in active markets for identical securities. |
Level 2 – | Other significant observable inputs (including quoted prices for similar securities, quoted prices in inactive markets, dealer indications, interest rates, yield curves, prepayment speeds, credit risk, default rates, inputs corroborated by observable market data, etc.). |
Level 3 – | Significant unobservable inputs (including the Fund’s own assumptions about the assumptions that market participants would use in pricing the security). |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Page 14
Baird MidCap Fund
SFAS 157 – Summary of Fair Value Exposure at June 30, 2009 (Unaudited) |
The following is a summary of the inputs used to value the Fund’s investments as of June 30, 2009:
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Equity | ||||||||||||||||
Air Freight & Logistics | $ | 236,847 | $ | — | $ | — | $ | 236,847 | ||||||||
Auto Components | 228,603 | — | — | 228,603 | ||||||||||||
Biotechnology | 435,185 | — | — | 435,185 | ||||||||||||
Capital Markets | 850,420 | — | — | 850,420 | ||||||||||||
Chemicals | 987,042 | — | — | 987,042 | ||||||||||||
Commercial Banks | 385,461 | — | — | 385,461 | ||||||||||||
Commercial Services & Supplies | 299,647 | — | — | 299,647 | ||||||||||||
Communications Equipment | 358,180 | — | — | 358,180 | ||||||||||||
Computers & Peripherals | 475,725 | — | — | 475,725 | ||||||||||||
Construction & Engineering | 210,140 | — | — | 210,140 | ||||||||||||
Containers & Packaging | 465,857 | — | — | 465,857 | ||||||||||||
Distributors | 433,046 | — | — | 433,046 | ||||||||||||
Diversified Supply Services | 345,230 | — | — | 345,230 | ||||||||||||
Electrical Equipment | 550,607 | — | — | 550,607 | ||||||||||||
Electronic Component | 406,166 | — | — | 406,166 | ||||||||||||
Energy Equipment & Services | 1,447,273 | — | — | 1,447,273 | ||||||||||||
Food Products | 620,301 | — | — | 620,301 | ||||||||||||
Health Care Equipment & Supplies | 614,484 | — | — | 614,484 | ||||||||||||
Health Care Providers & Services | 238,296 | — | — | 238,296 | ||||||||||||
Health Care Technology | 364,201 | — | — | 364,201 | ||||||||||||
Hotels Restaurants & Leisure | 941,235 | — | — | 941,235 | ||||||||||||
Internet Software & Services | 412,696 | — | — | 412,696 | ||||||||||||
IT Services | 1,697,378 | — | — | 1,697,378 | ||||||||||||
Life Sciences Tools & Services | 1,289,531 | — | — | 1,289,531 | ||||||||||||
Machinery | 1,589,339 | — | — | 1,589,339 | ||||||||||||
Media | 427,102 | — | — | 427,102 | ||||||||||||
Oil & Gas | 423,563 | — | — | 423,563 | ||||||||||||
Road & Rail | 244,087 | — | ��� | 244,087 | ||||||||||||
Semiconductor & Semiconductor Equipment | 1,227,189 | — | — | 1,227,189 | ||||||||||||
Software | 728,616 | — | — | 728,616 | ||||||||||||
Specialty Retail | 1,545,278 | — | — | 1,545,278 | ||||||||||||
Textiles, Apparel & Luxury Goods | 393,110 | — | — | 393,110 | ||||||||||||
Trading Companies & Distributors | 661,154 | — | — | 661,154 | ||||||||||||
Total Equity | 21,532,989 | — | — | 21,532,989 | ||||||||||||
Short-Term Investments | ||||||||||||||||
Money Market Mutual Funds | 602,448 | — | — | 602,448 | ||||||||||||
Total Short-Term Investments | 602,448 | — | — | 602,448 | ||||||||||||
Investments Purchased with Cash | ||||||||||||||||
Proceeds from Securities Lending | ||||||||||||||||
Commercial Paper | — | 334,935 | — | 334,935 | ||||||||||||
Corporate Bond | — | 131,137 | — | 131,137 | ||||||||||||
Money Market Mutual Funds | 7,721,851 | — | 50,233 | 7,772,084 | ||||||||||||
Total Investments Purchased with Cash | ||||||||||||||||
Proceeds from Securities Lending | 7,721,851 | 466,072 | 50,233 | 8,238,156 | ||||||||||||
Total Investments in Securities | $ | 29,857,288 | $ | 466,072 | $ | 50,233 | $ | 30,373,593 |
Page 15
Baird MidCap Fund
SFAS 157 – Summary of Fair Value Exposure at June 30, 2009 (Unaudited) |
Level 3 Reconciliation Disclosure
Following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value.
Description | Investments in Securities | |||
Balance as of December 31, 2008 | $ | 106,487 | ||
Accrued discounts/premiums | — | |||
Realized gain (loss) | — | |||
Change in unrealized appreciation (depreciation) | — | |||
Net purchases (sales) | (56,254 | ) | ||
Transfers in and/or out of Level 3* | — | |||
Balance as of June 30, 2009 | $ | 50,233 | ||
Change in unrealized appreciation (depreciation) during | ||||
the year for level 3 investments held at June 30, 2009. | — |
* | The information used in the above reconciliation represents fiscal year to date activity for any investments identified as using Level 3 inputs at either the beginning or end of the current fiscal period. Transfers in or out of Level 3 represents either the beginning value (for transfers in) or ending value (for transfers out) of any security or instrument where a change in the pricing level occurred from the beginning to the end of the period. |
Page 16
Baird Funds, Inc.
Additional Information on Fund Expenses June 30, 2009 (Unaudited) |
Example
As a shareholder of a mutual fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments, reinvested dividends, or other distributions; redemption fees; and exchange fees; and (2) ongoing costs, such as management fees; distribution and/or service (12b-1) fees; and other fund expenses. Although the Funds do not charge any sales loads, redemption fees, or other transaction fees, you will be assessed fees for outgoing wire transfers, returned checks and stop payment orders at prevailing rates charged by U.S. Bancorp Fund Services, LLC, the Fund’s transfer agent. If you request that a redemption be made by wire transfer, currently the Fund’s transfer agent charges a $15.00 fee.
This Example is intended to help you understand your ongoing costs (in dollars) of investing in each Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (1/1/09 – 6/30/09).
Actual Expenses
The third and fourth columns of the following table provide information about account values based on actual returns and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 – 8.6), then multiply the result by the number in the fourth column entitled “Expenses Paid During Period’’ to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The fifth and sixth columns of the following table provide information about hypothetical account values and hypothetical expenses based on the Funds’ actual expense ratios and an assumed rate of return of 5% per year before expenses, which is not the Funds’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds and other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other mutual funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the sixth column of the table (entitled “Expenses Paid During Period”) is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different mutual funds. In addition, if these transactional costs were included, your costs could have been higher.
Page 17
Baird Funds, Inc.
Additional Information on Fund Expenses June 30, 2009 (Unaudited) |
Actual vs. Hypothetical Returns
For the Six Months Ended June 30, 2009
Hypothetical (5% return | |||||||||||
Actual | before expenses) | ||||||||||
Fund’s | Beginning | Ending | Expenses | Ending | Expenses | ||||||
Annualized | Account | Account | Paid | Account | Paid | ||||||
Expense | Value | Value | During | Value | During | ||||||
Ratio(1) | 1/1/09 | 6/30/09 | Period(1) | 6/30/09 | Period(1) | ||||||
Baird LargeCap Fund | |||||||||||
Institutional Class | 0.75% | $1,000.00 | $1,134.40 | $3.97 | $1,021.08 | $3.76 | |||||
Investor Class | 1.00% | $1,000.00 | $1,132.60 | $5.29 | $1,019.84 | $5.01 | |||||
Baird MidCap Fund | |||||||||||
Institutional Class | 0.85% | $1,000.00 | $1,131.70 | $4.49 | $1,020.58 | $4.26 | |||||
Investor Class | 1.10% | $1,000.00 | $1,131.40 | $5.81 | $1,019.34 | $5.51 |
(1) | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by 181 days and divided by 365 to reflect the one-half year period. |
Page 18
Baird Funds, Inc.
Statements of Assets and Liabilities June 30, 2009 (Unaudited) |
Baird LargeCap | Baird MidCap | |||||||
Fund | Fund | |||||||
ASSETS: | ||||||||
Investments, at value | $ | 24,157,131 | $ | 30,373,593 | ||||
(cost $24,088,747 and $31,399,683, respectively) | ||||||||
Dividends receivable | 20,187 | 4,935 | ||||||
Interest receivable | 182 | 278 | ||||||
Receivable for fund shares sold | — | 15,200 | ||||||
Other assets | 14,894 | 16,229 | ||||||
Total assets | 24,192,394 | 30,410,235 | ||||||
LIABILITIES: | ||||||||
Payable for collateral received for securities loaned | 6,533,431 | 8,238,156 | ||||||
Payable to Advisor and Distributor | 1,898 | 9,388 | ||||||
Payable to Custodian | 14,118 | 36,183 | ||||||
Payable for fund shares repurchased | 18,977 | 27,311 | ||||||
Accrued expenses and other liabilities | 31,003 | 37,214 | ||||||
Total liabilities | 6,599,427 | 8,348,252 | ||||||
NET ASSETS | $ | 17,592,967 | $ | 22,061,983 | ||||
NET ASSETS CONSIST OF: | ||||||||
Capital stock | $ | 23,245,674 | $ | 26,651,734 | ||||
Accumulated undistributed net investment income | 44,629 | 11,224 | ||||||
Accumulated net realized loss on investments sold | (5,765,720 | ) | (3,574,885 | ) | ||||
Net unrealized appreciation (depreciation) on investments | 68,384 | (1,026,090 | ) | |||||
NET ASSETS | $ | 17,592,967 | $ | 22,061,983 | ||||
INSTITUTIONAL CLASS SHARES | ||||||||
Net Assets | $ | 17,295,740 | $ | 20,474,908 | ||||
Shares outstanding | ||||||||
($0.01 par value, unlimited shares authorized) | 2,732,767 | 3,218,496 | ||||||
Net asset value, offering and redemption price per share | $ | 6.33 | $ | 6.36 | ||||
INVESTOR CLASS SHARES | ||||||||
Net Assets | $ | 297,227 | $ | 1,587,075 | ||||
Shares outstanding | ||||||||
($0.01 par value, unlimited shares authorized) | 47,054 | 256,071 | ||||||
Net asset value, offering and redemption price per share | $ | 6.32 | $ | 6.20 |
The accompanying notes are an integral part of these financial statements.
Page 19
Baird Funds, Inc.
Statements of Operations Six Months Ended June 30, 2009 (Unaudited) |
Baird | Baird | |||||||
LargeCap Fund | MidCap Fund | |||||||
INVESTMENT INCOME: | ||||||||
Dividends (net of foreign taxes withheld of $114 and $0, respectively) | $ | 99,154 | $ | 82,168 | ||||
Income from securities lending (Note 6) | 6,051 | 13,003 | ||||||
Interest | 2,593 | 2,750 | ||||||
Total investment income | 107,798 | 97,921 | ||||||
EXPENSES: | ||||||||
Investment advisory fees | 54,628 | 74,854 | ||||||
Administration fees | 2,148 | 2,498 | ||||||
Shareholder servicing fees | 7,533 | 7,571 | ||||||
Fund accounting fees | 1,767 | 2,041 | ||||||
Professional fees | 14,337 | 13,987 | ||||||
Federal and state registration | 14,149 | 11,636 | ||||||
Directors fees | 12,560 | 12,460 | ||||||
Custody fees | 2,753 | 2,839 | ||||||
Reports to shareholders | 1,953 | 2,665 | ||||||
Distribution fees – Investor Class Shares (Note 8) | 335 | 1,862 | ||||||
Miscellaneous expenses | 662 | 831 | ||||||
Total expenses | 112,825 | 133,244 | ||||||
Expense reimbursement by Advisor (Note 5) | (49,458 | ) | (46,547 | ) | ||||
Total expenses | 63,367 | 86,697 | ||||||
NET INVESTMENT INCOME | 44,431 | 11,224 | ||||||
REALIZED AND UNREALIZED GAIN ON INVESTMENTS: | ||||||||
Net realized loss on investments | (1,618,686 | ) | (306,038 | ) | ||||
Change in unrealized appreciation/depreciation on investments | 3,775,678 | 2,883,196 | ||||||
Net realized and unrealized gain on investments | 2,156,992 | 2,577,158 | ||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 2,201,423 | $ | 2,588,382 |
The accompanying notes are an integral part of these financial statements.
Page 20
Baird Funds, Inc.
Statements of Changes in Net Assets |
Baird LargeCap Fund | ||||||||
Six Months Ended | ||||||||
June 30, 2009 | Year Ended | |||||||
(Unaudited) | December 31, 2008 | |||||||
OPERATIONS: | ||||||||
Net investment income | $ | 44,431 | $ | 75,378 | ||||
Net realized loss on investments | (1,618,686 | ) | (2,680,501 | ) | ||||
Change in unrealized appreciation/depreciation on investments | 3,775,678 | (8,322,225 | ) | |||||
Net increase (decrease) in net assets resulting from operations | 2,201,423 | (10,927,348 | ) | |||||
CAPITAL SHARE TRANSACTIONS: | ||||||||
Proceeds from shares sold | 1,272,139 | 2,906,588 | ||||||
Shares issued to holders in reinvestment of dividends | — | 80,523 | ||||||
Cost of shares redeemed | (2,490,818 | ) | (3,752,903 | ) | ||||
Net decrease in net assets resulting from capital share transactions | (1,218,679 | ) | (765,792 | ) | ||||
DISTRIBUTIONS TO | ||||||||
INSTITUTIONAL CLASS SHAREHOLDERS: | ||||||||
From net investment income | — | (81,425 | ) | |||||
DISTRIBUTIONS TO | ||||||||
INVESTOR CLASS SHAREHOLDERS: | ||||||||
From net investment income | — | — | ||||||
TOTAL INCREASE (DECREASE) IN NET ASSETS | 982,744 | (11,774,565 | ) | |||||
NET ASSETS: | ||||||||
Beginning of period | 16,610,223 | 28,384,788 | ||||||
End of period (including undistributed net investment income | ||||||||
of $44,629 and $198, respectively) | $ | 17,592,967 | $ | 16,610,223 |
The accompanying notes are an integral part of these financial statements.
Page 21
Baird Funds, Inc.
Statements of Changes in Net Assets |
Baird MidCap Fund | ||||||||
Six Months Ended | ||||||||
June 30, 2009 | Year Ended | |||||||
(Unaudited) | December 31, 2008 | |||||||
OPERATIONS: | ||||||||
Net investment income | $ | 11,224 | $ | 10,353 | ||||
Net realized loss on investments | (306,038 | ) | (2,859,632 | ) | ||||
Change in unrealized appreciation/depreciation on investments | 2,883,196 | (12,378,757 | ) | |||||
Net increase (decrease) in net assets resulting from operations | 2,588,382 | (15,228,036 | ) | |||||
CAPITAL SHARE TRANSACTIONS: | ||||||||
Proceeds from shares sold | 998,438 | 3,082,022 | ||||||
Shares issued to holders in reinvestment of dividends | — | 14,311 | ||||||
Cost of shares redeemed | (1,251,657 | ) | (9,527,280 | ) | ||||
Net decrease in net assets resulting from capital share transactions | (253,219 | ) | (6,430,947 | ) | ||||
DISTRIBUTIONS TO | ||||||||
INSTITUTIONAL CLASS SHAREHOLDERS: | ||||||||
From net investment income | — | (14,588 | ) | |||||
DISTRIBUTIONS TO | ||||||||
INVESTOR CLASS SHAREHOLDERS: | ||||||||
From net investment income | — | — | ||||||
TOTAL INCREASE (DECREASE) IN NET ASSETS | 2,335,163 | (21,673,571 | ) | |||||
NET ASSETS: | ||||||||
Beginning of period | 19,726,820 | 41,400,391 | ||||||
End of period (including undistributed net investment income | ||||||||
of $11,224 and $0, respectively) | $ | 22,061,983 | $ | 19,726,820 |
The accompanying notes are an integral part of these financial statements.
Page 22
Baird Funds, Inc.
Financial Highlights |
Baird LargeCap Fund – Institutional Class | ||||||||||||||||||||||||
Six Months | ||||||||||||||||||||||||
Ended | ||||||||||||||||||||||||
June 30, 2009 | Year Ended December 31, | |||||||||||||||||||||||
(Unaudited) | 2008 | 2007 | 2006 | 2005 | 2004 | |||||||||||||||||||
Per Share Data: | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 5.59 | $ | 9.33 | $ | 8.53 | $ | 8.33 | $ | 8.13 | $ | 7.78 | ||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income | 0.02 | 0.03 | 0.02 | 0.04 | 0.04 | (1) | 0.06 | (1) | ||||||||||||||||
Net realized and unrealized | ||||||||||||||||||||||||
gains (losses) on investments | 0.72 | (3.74 | ) | 0.80 | 0.20 | 0.24 | 0.35 | |||||||||||||||||
Total from investment operations | 0.74 | (3.71 | ) | 0.82 | 0.24 | 0.28 | 0.41 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||||
Dividends from net investment income | — | (0.03 | ) | (0.02 | ) | (0.04 | ) | (0.08 | ) | (0.06 | ) | |||||||||||||
Net asset value, end of period | $ | 6.33 | $ | 5.59 | $ | 9.33 | $ | 8.53 | $ | 8.33 | $ | 8.13 | ||||||||||||
Total return | 13.44 | %(2) | (39.88 | %) | 9.63 | % | 2.89 | % | 3.39 | % | 5.21 | % | ||||||||||||
Supplemental data and ratios: | ||||||||||||||||||||||||
Net assets, end of period | $ | 17,295,740 | $ | 16,349,025 | $ | 27,644,009 | $ | 27,442,329 | $ | 27,375,626 | $ | 64,754,140 | ||||||||||||
Ratio of expenses to average net assets | 0.75 | %(3) | 0.75 | % | 0.75 | % | 0.75 | % | 0.75 | % | 0.75 | % | ||||||||||||
Ratio of expenses to average | ||||||||||||||||||||||||
net assets (before waivers) | 1.34 | %(3) | 1.17 | % | 1.10 | % | 1.12 | % | 0.93 | % | 0.93 | % | ||||||||||||
Ratio of net investment income | ||||||||||||||||||||||||
to average net assets | 0.53 | %(3) | 0.32 | % | 0.25 | % | 0.44 | % | 0.46 | % | 0.72 | % | ||||||||||||
Ratio of net investment income (loss) | ||||||||||||||||||||||||
to average net assets (before waivers) | (0.06 | %)(3) | (0.10 | %) | (0.10 | %) | 0.07 | % | 0.28 | % | 0.54 | % | ||||||||||||
Portfolio turnover rate(4) | 33.8 | %(2) | 43.0 | % | 72.2 | % | 63.9 | % | 28.6 | % | 23.2 | % |
(1) | Calculated using average shares outstanding during the period. |
(2) | Not annualized. |
(3) | Annualized. |
(4) | Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. |
The accompanying notes are an integral part of these financial statements.
Page 23
Baird Funds, Inc.
Financial Highlights |
Baird LargeCap Fund – Investor Class | ||||||||||||||||||||||||
Six Months | ||||||||||||||||||||||||
Ended | ||||||||||||||||||||||||
June 30, 2009 | Year Ended December 31, | |||||||||||||||||||||||
(Unaudited) | 2008 | 2007 | 2006 | 2005 | 2004 | |||||||||||||||||||
Per Share Data: | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 5.59 | $ | 9.29 | $ | 8.50 | $ | 8.29 | $ | 8.09 | $ | 7.75 | ||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income | 0.01 | 0.00 | (1) | 0.00 | (1) | 0.01 | 0.02 | (2) | 0.04 | (2) | ||||||||||||||
Net realized and unrealized | ||||||||||||||||||||||||
gains (losses) on investments | 0.72 | (3.70 | ) | 0.79 | 0.21 | 0.23 | 0.35 | |||||||||||||||||
Total from investment operations | 0.73 | (3.70 | ) | 0.79 | 0.22 | 0.25 | 0.39 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||||
Dividends from net investment income | — | — | — | (0.01 | ) | (0.05 | ) | (0.05 | ) | |||||||||||||||
Net asset value, end of period | $ | 6.32 | $ | 5.59 | $ | 9.29 | $ | 8.50 | $ | 8.29 | $ | 8.09 | ||||||||||||
Total return | (13.26 | %)(3) | (39.94 | %) | 9.29 | % | 2.64 | % | 3.15 | % | 5.00 | % | ||||||||||||
Supplemental data and ratios: | ||||||||||||||||||||||||
Net assets, end of period | $ | 297,227 | $ | 261,198 | $ | 740,779 | $ | 1,087,948 | $ | 2,400,525 | $ | 1,900,053 | ||||||||||||
Ratio of expenses to average net assets | 1.00 | %(4) | 1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | ||||||||||||
Ratio of expenses to average | ||||||||||||||||||||||||
net assets (before waivers) | 1.59 | %(4) | 1.42 | % | 1.35 | % | 1.37 | % | 1.18 | % | 1.18 | % | ||||||||||||
Ratio of net investment income | ||||||||||||||||||||||||
to average net assets | 0.28 | %(4) | 0.07 | % | 0.00 | % | 0.19 | % | 0.21 | % | 0.47 | % | ||||||||||||
Ratio of net investment income (loss) | ||||||||||||||||||||||||
to average net assets (before waivers) | (0.31 | %)(4) | (0.35 | %) | (0.35 | %) | (0.18 | %) | 0.03 | % | 0.29 | % | ||||||||||||
Portfolio turnover rate(5) | 33.8 | %(3) | 43.0 | % | 72.2 | % | 63.9 | % | 28.6 | % | 23.2 | % |
(1) | Amount is less than $0.01. |
(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. |
The accompanying notes are an integral part of these financial statements.
Page 24
Baird Funds, Inc.
Financial Highlights |
Baird MidCap Fund – Institutional Class | ||||||||||||||||||||||||
Six Months | ||||||||||||||||||||||||
Ended | ||||||||||||||||||||||||
June 30, 2009 | Year Ended December 31, | |||||||||||||||||||||||
(Unaudited) | 2008 | 2007 | 2006 | 2005 | 2004 | |||||||||||||||||||
Per Share Data: | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 5.63 | $ | 9.62 | $ | 9.33 | $ | 11.12 | $ | 10.91 | $ | 9.72 | ||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income (loss)(1) | 0.01 | 0.01 | (0.01 | ) | (0.02 | ) | (0.02 | ) | (0.04 | ) | ||||||||||||||
Net realized and unrealized | ||||||||||||||||||||||||
gains (losses) on investments | 0.72 | (3.99 | ) | 1.99 | 0.46 | 0.63 | 1.25 | |||||||||||||||||
Total from investment operations | 0.73 | (3.98 | ) | 1.98 | 0.44 | 0.61 | 1.21 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||||
Distributions from net investment income | — | (0.01 | ) | — | — | — | — | |||||||||||||||||
Distributions from net realized gains | — | — | (1.69 | ) | (2.23 | ) | (0.40 | ) | (0.02 | ) | ||||||||||||||
Total distributions | — | (0.01 | ) | (1.69 | ) | (2.23 | ) | (0.40 | ) | (0.02 | ) | |||||||||||||
Net asset value, end of period | $ | 6.36 | $ | 5.63 | $ | 9.62 | $ | 9.33 | $ | 11.12 | $ | 10.91 | ||||||||||||
Total return | 13.17 | %(2) | (41.53 | %) | 20.89 | % | 3.93 | % | 5.56 | % | 12.44 | % | ||||||||||||
Supplemental data and ratios: | ||||||||||||||||||||||||
Net assets, end of period | $ | 20,474,908 | $ | 18,163,034 | $ | 36,616,547 | $ | 32,057,214 | $ | 85,670,669 | $ | 86,476,869 | ||||||||||||
Ratio of expenses to average net assets | 0.85 | %(3) | 0.85 | % | 0.85 | % | 0.85 | % | 0.85 | % | 0.85 | % | ||||||||||||
Ratio of expenses to average | ||||||||||||||||||||||||
net assets (before waivers) | 1.32 | %(3) | 1.19 | % | 1.11 | % | 1.01 | % | 0.98 | % | 1.05 | % | ||||||||||||
Ratio of net investment income (loss) | ||||||||||||||||||||||||
to average net assets | 0.13 | %(3) | 0.06 | % | (0.06 | %) | (0.17 | %) | (0.21 | %) | (0.43 | %) | ||||||||||||
Ratio of net investment income (loss) | ||||||||||||||||||||||||
to average net assets (before waivers) | (0.34 | %)(3) | (0.28 | %) | (0.32 | %) | (0.33 | %) | (0.34 | %) | (0.63 | %) | ||||||||||||
Portfolio turnover rate(4) | 33.6 | %(2) | 74.0 | % | 72.3 | % | 78.6 | % | 77.4 | % | 77.9 | % |
(1) | Calculated using average shares outstanding during the period. |
(2) | Not annualized. |
(3) | Annualized. |
(4) | Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. |
The accompanying notes are an integral part of these financial statements.
Page 25
Baird Funds, Inc.
Financial Highlights |
Baird MidCap Fund – Investor Class | ||||||||||||||||||||||||
Six Months | ||||||||||||||||||||||||
Ended | ||||||||||||||||||||||||
June 30, 2009 | Year Ended December 31, | |||||||||||||||||||||||
(Unaudited) | 2008 | 2007 | 2006 | 2005 | 2004 | |||||||||||||||||||
Per Share Data: | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 5.49 | $ | 9.40 | $ | 9.17 | $ | 10.99 | $ | 10.82 | $ | 9.65 | ||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment loss(1) | (0.00 | )(2) | (0.02 | ) | (0.04 | ) | (0.04 | ) | (0.05 | ) | (0.07 | ) | ||||||||||||
Net realized and unrealized | ||||||||||||||||||||||||
gains (losses) on investments | 0.71 | (3.89 | ) | 1.96 | 0.45 | 0.62 | 1.26 | |||||||||||||||||
Total from investment operations | 0.71 | (3.91 | ) | 1.92 | 0.41 | 0.57 | 1.19 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||||
Distributions from net realized gains | — | — | (1.69 | ) | (2.23 | ) | (0.40 | ) | (0.02 | ) | ||||||||||||||
Net asset value, end of period | $ | 6.20 | $ | 5.49 | $ | 9.40 | $ | 9.17 | $ | 10.99 | $ | 10.82 | ||||||||||||
Total return | 13.14 | %(3) | (41.70 | %) | 20.61 | % | 3.73 | % | 5.24 | % | 12.32 | % | ||||||||||||
Supplemental data and ratios: | ||||||||||||||||||||||||
Net assets, end of period | $ | 1,587,075 | $ | 1,563,786 | $ | 4,783,844 | $ | 5,023,621 | $ | 4,506,947 | $ | 3,944,857 | ||||||||||||
Ratio of expenses to average net assets | 1.10 | %(4) | 1.10 | % | 1.10 | % | 1.10 | % | 1.10 | % | 1.10 | % | ||||||||||||
Ratio of expenses to average | ||||||||||||||||||||||||
net assets (before waivers) | 1.57 | %(4) | 1.44 | % | 1.36 | % | 1.26 | % | 1.23 | % | 1.30 | % | ||||||||||||
Ratio of net investment loss | ||||||||||||||||||||||||
to average net assets | (0.12 | %)(4) | (0.19 | %) | (0.31 | %) | (0.42 | %) | (0.46 | %) | (0.68 | %) | ||||||||||||
Ratio of net investment loss | ||||||||||||||||||||||||
to average net assets (before waivers) | (0.59 | %)(4) | (0.53 | %) | (0.57 | %) | (0.58 | %) | (0.59 | %) | (0.88 | %) | ||||||||||||
Portfolio turnover rate(5) | 33.6 | %(3) | 74.0 | % | 72.3 | % | 78.6 | % | 77.4 | % | 77.9 | % |
(1) | Calculated using average shares outstanding during the period. |
(2) | Amount is less than ($0.005). |
(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. |
The accompanying notes are an integral part of these financial statements.
Page 26
Baird Funds, Inc.
Notes to the Financial Statements June 30, 2009 (Unaudited) |
1. | ORGANIZATION |
Baird Funds, Inc. (the “Corporation”) was incorporated on June 9, 2000 as a Wisconsin corporation and is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The accompanying financial statements include the Baird LargeCap Fund and the Baird MidCap Fund (each a “Fund” and collectively the “Funds”), two of the eight portfolios comprising the Corporation. Pursuant to the 1940 Act, the Funds are “diversified” series of the Corporation. The investment advisor to the Funds is Robert W. Baird & Co. Incorporated (“Baird” or the “Advisor”).
The Baird LargeCap Fund commenced operations with the sale of both Institutional and Investor Class Shares on September 29, 2000. The Baird MidCap Fund commenced operations with the sale of both Institutional and Investor Class Shares on December 29, 2000. The Institutional Class Shares are not subject to a distribution and service (12b-1) fee, while the Investor Class Shares are subject to a distribution and service (12b-1) fee up to 0.25%.
The Baird LargeCap Fund seeks long-term growth of capital through investments in equity securities of large-capitalization companies. Dividend income is a secondary consideration.
The Baird MidCap Fund seeks long-term growth of capital through investments in equity securities of mid-capitalization companies.
On June 30, 2009, shareholders affiliated with the Advisor held 81% of the Baird LargeCap Fund and 34% of the Baird MidCap Fund. These shareholders included the Advisor’s participant-directed retirement and deferred compensation plans and the Baird Foundation.
2. | SIGNIFICANT ACCOUNTING POLICIES |
The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of their financial statements. These policies are in conformity with accounting principles generally accepted in the United States of America.
a) | Investment Valuation – Section 2(a)(41) of the 1940 Act, together with the rules and interpretations of the SEC, require the Funds, in computing NAV, to value their portfolio securities using market quotations when they are “readily available.” When market quotations are not readily available (e.g., because there is no regular market quotation for such securities, the market for such security is limited, the validity of quotations is questionable or, for debt securities, IDC does not provide a price), the Board of Directors of the Corporation must value the securities at “fair value determined in good faith.” The Board has delegated such responsibility to the Advisor pursuant to pricing policies and procedures that the Board has adopted and regularly reviews. |
In general, the “fair value” of a security means the amount that the Funds might reasonably expect to receive for the security upon its current sale. Pursuant to Statement of Financial Accounting Standards No. 157 (“SFAS 157), “fair value” means “the price that would be received to sell [a security] in an orderly transaction between market participants at the measurement date.” |
Page 27
Baird Funds, Inc.
Notes to the Financial Statements June 30, 2009 (Unaudited) |
2. | SIGNIFICANT ACCOUNTING POLICIES (cont.) |
Consistent with Section 2(a)(41) of the 1940 Act and SFAS 157, the Funds price their securities as follows: Common stocks that are listed on a securities exchange (other than NASDAQ) are valued at the last quoted sale price. Securities traded on NASDAQ are valued at the NASDAQ Official Closing Price. Price information on listed stocks is taken from the exchange where the security is primarily traded. Securities that were not traded on the valuation date, as well as stocks that are not listed on an exchange, including NASDAQ, are valued at the average of the current bid and asked price. Debt securities are valued by an independent pricing service using valuation methods that are designed to represent fair value, such as matrix pricing and other analytical pricing models, market transactions and dealer quotations. Debt securities purchased with a remaining maturity of 60 days or less are valued at acquisition cost plus or minus any amortized discount or premium. Investments in mutual funds are valued at their stated net asset value. Other assets and securities for which no quotations are readily available are valued at fair value as determined in good faith by the Advisor in accordance with procedures approved by the Corporation’s Board of Directors. In accordance with such procedures, the Advisor may use broker quotes or, if the broker quotes are unavailable or deemed to be unreliable, fair value will be determined by a valuation committee of the Advisor. In determining fair value, the valuation committee takes into account all relevant factors and available information. Consequently, the price of the security used by a Fund to calculate its NAV may differ from quoted or published prices for the same security. Fair value pricing involves subjective judgments and there is no single standard for determining a security’s fair value. As a result, different mutual funds could reasonably arrive at a different fair value 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, given the volatility and periodic illiquidity experienced in current markets, the prices determined for any individual security on any given day may vary significantly from the amount that can be obtained in an actual sale of that security, and the Funds’ NAV may fluctuate significantly from day to day or from period to period. |
In September 2006, the Financial Accounting Standards Board (FASB) issued SFAS 157, “Fair Value Measurements.” SFAS 157 defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and expands disclosure about fair value measurements. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. Management has determined that SFAS 157 had no material impact on the Funds’ financial statements. |
In March 2008, Statement of Financial Accounting Standards No. 161, “Disclosures about Derivative Instruments and Hedging Activities” (“SFAS 161”) was issued and is effective for fiscal years beginning after November 15, 2008. SFAS 161 is intended to improve financial reporting for derivative instruments by requiring enhanced disclosure that enables investors to understand how and why an entity uses derivatives, how derivatives are accounted for, and how derivative instruments affect an entity’s results of operations and financial position. Management has determined that SFAS 161 had no material impact on the Funds’ financial statements because the Funds do not maintain any positions in derivative instruments or engage in hedging activities. |
In preparing these financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through August 28, 2009, the date the financial statements were available to be issued. |
Page 28
Baird Funds, Inc.
Notes to the Financial Statements June 30, 2009 (Unaudited) |
2. | SIGNIFICANT ACCOUNTING POLICIES (cont.) |
b) | Foreign Securities – Foreign securities are defined as securities issued by companies that are organized outside the United States. Investing in securities of foreign companies and foreign governments involves special risks and considerations not typically associated with investing in U.S. companies and the U.S. government. These risks include revaluation of currencies and future adverse political and economic developments. Moreover, securities of many foreign companies and foreign governments and their markets may be less liquid and their prices more volatile than those of securities of comparable U.S. companies and the U.S. government. Occasionally, events that affect those values and exchange rates may occur after the close of the exchange on which such securities are traded. If such events materially affect the value of a Fund’s securities, these securities may be valued at their fair value pursuant to procedures adopted by the Board of Directors. All the foreign securities owned by the Funds as of June 30, 2009 are traded on the New York Stock Exchange or NASDAQ. |
c) | Federal Income Taxes – The Funds intend to continue to qualify as regulated investment companies as provided in subchapter M of the Internal Revenue Code and to distribute substantially all of their taxable income to their shareholders in a manner which results in no tax cost to the Funds. Therefore, no federal income or excise tax provision is recorded. |
Effective June 29, 2007, the Funds adopted Financial Accounting Standards Board (FASB) Interpretation No. 48 (FIN 48), “Accounting for Uncertainty in Income Taxes,” a clarification of FASB Statement No. 109, “Accounting for Income Taxes.” FIN 48 establishes financial reporting rules regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. Management has determined that FIN 48 has not resulted in any liability to the Funds. |
d) | Distributions to Shareholders – Dividends from net investment income, if any, are declared and paid annually. Distributions of net realized gains, if any, are declared and paid at least annually. |
e) | Allocation of Income and Expenses – Each Fund is charged for those expenses directly attributable to it. Expenses directly attributable to a class of shares, such as Rule 12b-1 distribution fees, are charged to that class of shares. Income, expenses, and realized and unrealized gains and losses are allocated to the classes based on their respective net assets. Expenses that are not directly attributable to a Fund are allocated among the series of the Corporation in proportion to their assets. |
f) | Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Page 29
Baird Funds, Inc.
Notes to the Financial Statements June 30, 2009 (Unaudited) |
2. | SIGNIFICANT ACCOUNTING POLICIES (cont.) |
g) | Other – Investment and shareholder transactions are recorded on trade date. The Funds determine the gain or loss realized from investment transactions by comparing the original cost of the security lot sold with the net sales proceeds. Dividend income is recognized on the ex-dividend date and interest income is recognized on an accrual basis. Accounting principles generally accepted in the United States require that permanent financial reporting and tax differences be reclassified in the capital accounts. |
h) | Guarantees and Indemnifications – In the normal course of business, the Funds enter into contracts with service providers that contain general indemnification clauses. The Funds’ maximum exposure under these arrangements is unknown and this would involve future claims against the Funds that have not yet occurred. Based on experience, the Funds would expect the risk of loss to be remote. |
3. | CAPITAL SHARE TRANSACTIONS |
The following table summarizes the capital share transactions of each Fund for the past two fiscal periods:
BAIRD LARGECAP FUND
Six Months Ended | Six Months Ended | ||||||||||||||||
June 30, 2009 | June 30, 2009 | ||||||||||||||||
Institutional Class Shares | Shares | Amount | Investor Class Shares | Shares | Amount | ||||||||||||
Shares sold | 227,815 | $ | 1,267,139 | Shares sold | 962 | $ | 5,000 | ||||||||||
Shares redeemed | (419,318 | ) | (2,486,962 | ) | Shares redeemed | (663 | ) | (3,856 | ) | ||||||||
Net decrease | (191,503 | ) | $ | (1,219,823 | ) | Net increase | 299 | $ | 1,144 | ||||||||
Shares Outstanding: | Shares Outstanding: | ||||||||||||||||
Beginning of period | 2,924,270 | Beginning of period | 46,755 | ||||||||||||||
End of period | 2,732,767 | End of period | 47,054 |
Year Ended | Year Ended | ||||||||||||||||
December 31, 2008 | December 31, 2008 | ||||||||||||||||
Institutional Class Shares | Shares | Amount | Investor Class Shares | Shares | Amount | ||||||||||||
Shares sold | 395,392 | $ | 2,875,596 | Shares sold | 3,893 | $ | 30,992 | ||||||||||
Shares issued to | Shares issued to | ||||||||||||||||
shareholders in | shareholders in | ||||||||||||||||
reinvestment of | reinvestment of | ||||||||||||||||
dividends | 14,995 | 80,523 | dividends | — | — | ||||||||||||
Shares redeemed | (449,499 | ) | (3,446,338 | ) | Shares redeemed | (36,862 | ) | (306,565 | ) | ||||||||
Net decrease | (39,112 | ) | $ | (490,219 | ) | Net decrease | (32,969 | ) | $ | (275,573 | ) | ||||||
Shares Outstanding: | Shares Outstanding: | ||||||||||||||||
Beginning of period | 2,963,382 | Beginning of period | 79,724 | ||||||||||||||
End of period | 2,924,270 | End of period | 46,755 |
Page 30
Baird Funds, Inc.
Notes to the Financial Statements June 30, 2009 (Unaudited) |
3. | CAPITAL SHARE TRANSACTIONS (cont.) |
BAIRD MIDCAP FUND
Six Months Ended | Six Months Ended | ||||||||||||||||
June 30, 2009 | June 30, 2009 | ||||||||||||||||
Institutional Class Shares | Shares | Amount | Investor Class Shares | Shares | Amount | ||||||||||||
Shares sold | 166,827 | $ | 924,214 | Shares sold | 15,228 | $ | 74,224 | ||||||||||
Shares redeemed | (176,350 | ) | (1,014,465 | ) | Shares redeemed | (44,063 | ) | (237,192 | ) | ||||||||
Net decrease | (9,523 | ) | $ | (90,251 | ) | Net decrease | (28,835 | ) | $ | (162,968 | ) | ||||||
Shares Outstanding: | Shares Outstanding: | ||||||||||||||||
Beginning of period | 3,228,019 | Beginning of period | 284,906 | ||||||||||||||
End of period | 3,218,496 | End of period | 256,071 |
Year Ended | Year Ended | ||||||||||||||||
December 31, 2008 | December 31, 2008 | ||||||||||||||||
Institutional Class Shares | Shares | Amount | Investor Class Shares | Shares | Amount | ||||||||||||
Shares sold | 376,048 | $ | 2,765,434 | Shares sold | 41,456 | $ | 316,588 | ||||||||||
Shares issued to | Shares issued to | ||||||||||||||||
shareholders in | shareholders in | ||||||||||||||||
reinvestment of | reinvestment of | ||||||||||||||||
distributions | 2,660 | 14,311 | dividends | — | — | ||||||||||||
Shares redeemed | (955,817 | ) | (7,643,087 | ) | Shares redeemed | (265,423 | ) | (1,884,193 | ) | ||||||||
Net decrease | (577,109 | ) | $ | (4,863,342 | ) | Net decrease | (223,967 | ) | $ | (1,567,605 | ) | ||||||
Shares Outstanding: | Shares Outstanding: | ||||||||||||||||
Beginning of period | 3,805,128 | Beginning of period | 508,873 | ||||||||||||||
End of period | 3,228,019 | End of period | 284,906 |
Page 31
Baird Funds, Inc.
Notes to the Financial Statements June 30, 2009 (Unaudited) |
4. | INVESTMENT TRANSACTIONS AND INCOME TAX INFORMATION |
During the six months ended June 30, 2009, purchases and sales of investment securities (excluding short-term investments) were as follows:
Baird | Baird | |||||||
LargeCap Fund | MidCap Fund | |||||||
Purchases: | $ | 5,496,160 | $ | 6,573,165 | ||||
Sales: | $ | 6,477,622 | $ | 6,706,679 |
At December 31, 2008, accumulated earnings/losses on a tax basis were as follows:
Baird | Baird | |||||||
LargeCap | MidCap | |||||||
Fund | Fund | |||||||
Cost of Investments | $ | 27,362,405 | $ | 30,288,972 | ||||
Gross unrealized appreciation | $ | 913,224 | $ | 1,571,476 | ||||
Gross unrealized depreciation | (4,813,846 | ) | (5,645,446 | ) | ||||
Net unrealized depreciation | $ | (3,900,622 | ) | $ | (4,073,970 | ) | ||
Undistributed ordinary income* | $ | 9,629 | $ | 22,225 | ||||
Undistributed long-term capital gain | — | — | ||||||
Total distributable earnings | $ | 9,629 | $ | 22,225 | ||||
Other accumulated losses | $ | (3,963,137 | ) | $ | (3,126,388 | ) | ||
Total accumulated losses | $ | (7,854,130 | ) | $ | (7,178,133 | ) |
* | Undistributed ordinary income includes income from securities lending placed in reserve (see Note 6). |
Undistributed income or net realized gains for financial statement purposes may differ from amounts recognized for federal income tax purposes due to differences in the recognition and characterization of income, expense and capital gain items.
Under the current tax law, capital losses realized after October 31 may be deferred and treated as occurring on the first day of the following fiscal year. For the year ended December 31, 2008, the Baird LargeCap Fund and the Baird MidCap Fund elected to defer capital losses occurring between November 1, 2008 and December 31, 2008 in the amount of $1,651,089 and $2,034,254, respectively.
At December 31, 2008, the Baird LargeCap Fund had accumulated net realized capital loss carryovers of $929,167 that expire in 2016, $1,167,011 that expire in 2012 and $215,870 that expire in 2011. At December 31, 2008, the Baird MidCap Fund had accumulated net realized capital loss carryovers of $1,092,134 that expire in 2016. To the extent the Funds realize future net capital gains, taxable distributions to shareholders will be offset by any unused capital loss carryovers. During the year ended December 31, 2008, the Funds did not utilize any capital loss carryovers from previous years.
During the six months ended June 30, 2009, the Funds have not made any capital gain distributions or income dividends.
Page 32
Baird Funds, Inc.
Notes to the Financial Statements June 30, 2009 (Unaudited) |
4. | INVESTMENT TRANSACTIONS AND INCOME TAX INFORMATION (cont.) |
During the year ended December 31, 2008, the Funds paid the following dividends:
Ordinary Income Dividends | Net Long-Term Capital Gains | |||||
Baird LargeCap Fund | $81,425 | — | ||||
Baird MidCap Fund | $14,588 | — |
5. | INVESTMENT ADVISORY AND OTHER AGREEMENTS |
The Funds have entered into an Investment Advisory Agreement with Baird for the provision of investment advisory services. Pursuant to the Investment Advisory Agreement, the Advisor is entitled to receive a fee, calculated daily and payable monthly, at the annual rate of 0.65% for the Baird LargeCap Fund and 0.75% for the Baird MidCap Fund as applied to the respective Fund’s average daily net assets. Certain officers of the Advisor are also officers of the Funds.
For the year ended December 31, 2009 and through April 30, 2010, the Advisor has contractually agreed to waive its investment advisory fee and/or reimburse the Funds’ operating expenses (exclusive of brokerage, taxes, and extraordinary expenses) to the extent necessary to ensure that each Fund’s annual operating expenses do not exceed the following percentages of average daily net assets:
Institutional Class Shares | Investor Class Shares | |
Baird LargeCap Fund | 0.75% | 1.00% |
Baird MidCap Fund | 0.85% | 1.10% |
To the extent that the Advisor reimburses or absorbs fees and expenses, it may seek payment of such amounts for three years after the year in which expenses were reimbursed or absorbed. A Fund will make no such payment, however, if its total annual operating expenses exceed the expense limits in effect at the time the expenses were reimbursed or at the time these payments are proposed.
Six Months Ended | Fiscal Period Ended December 31, | ||||
June 30, | |||||
2009 | 2008 | 2007 | 2006 | ||
Reimbursed / Absorbed Expenses Subject | |||||
to Recovery by Advisor Until: | 2012 | 2011 | 2010 | 2009 | |
Baird LargeCap Fund | $49,458 | $ 99,829 | $100,379 | $ 98,794 | |
Baird MidCap Fund | $46,547 | $101,968 | $103,600 | $117,213 |
U.S. Bancorp Fund Services, LLC serves as transfer agent, administrator, and accounting services agent for the Funds. U.S. Bank, N.A. serves as custodian for the Funds.
Robert W. Baird & Co. Incorporated (the “Distributor”) is the sole distributor of the Funds pursuant to a distribution agreement.
No commissions were earned by the Distributor for services rendered as a registered broker-dealer in securities transactions for the Baird LargeCap Fund and Baird MidCap Fund for the six months ended June 30, 2009.
Page 33
Baird Funds, Inc.
Notes to the Financial Statements June 30, 2009 (Unaudited) |
6. | SECURITIES LENDING |
Each Fund may lend up to one-third of its total assets (including such loans) to borrowers under terms of participation in a securities lending program administered by FAF Advisors, Inc., an affiliate of the Funds’ custodian, transfer agent and administrator. The securities lending agreement requires that loans are collateralized at all times in an amount equal to at least 102% of the market value of any loaned securities at the time of the loan, plus accrued interest.
The Funds receive compensation in the form of fees and earn interest on the cash collateral. The amount of fees depends on a number of factors including the type of security and length of the loan. Each Fund continues to receive interest payments or dividends on the securities loaned during the borrowing period. Each Fund has the right under the terms of the securities lending agreement to recall the securities from the borrower on demand.
As of June 30, 2009, the Baird LargeCap and Baird MidCap Funds had loaned securities that were collateralized by cash equivalents. The cash collateral is invested by the custodian in accordance with approved investment guidelines. Those guidelines require the cash collateral to be invested in readily marketable, high quality, short-term obligations; however, such investments are subject to risk of payment delays or default on the part of the issuer or counterparty or otherwise may not generate sufficient interest to support the costs associated with securities lending. A Fund could also experience delays in recovering its securities and possible loss of income or value if the borrower fails to return the borrowed securities, although the Funds are indemnified from this risk by contract with the securities lending agent.
As of June 30, 2009, the market value of the securities on loan and payable on collateral due to broker were as follows:
Market Value of | Payable on Collateral | |
Securities on Loan | due to Broker | |
Baird LargeCap Fund | $6,086,448 | $6,533,431 |
Baird MidCap Fund | $7,642,837 | $8,238,156 |
The Funds receive cash as collateral in return for securities lent as part of a securities lending program. The collateral is invested in short-term securities including the Mount Vernon Prime Portfolio (a securities lending trust subject to Rule 2a-7 under the 1940 Act), other money market funds, certificates of deposit, commercial paper, corporate notes, government agency securities and repurchase agreements. The schedules of investments for the Funds include the particular cash collateral holdings as of June 30, 2009. The Funds intend to invest all of the collateral in the Mount Vernon Prime Portfolio once their existing cash collateral holdings mature or are liquidated or otherwise paid down. Currently, the Funds hold two cash collateral investments that are priced at fair value by the Valuation Committee of the Advisor: an interest in Atlantic East Funding Trust, LLC and shares of the Reserve Primary Fund. The interest in Atlantic East Funding Trust, LLC is priced at par based on the underlying market value of the securities owned by the Atlantic East Funding Trust, LLC, amounts payable under an agreement from the Funds’ transfer agent and administrator to cover losses realized by the Funds on this investment (up to a certain amount), and a securities lending income reserve. This price for the Funds' interest in Atlantic East Funding Trust, LLC is reflected in the Funds' Schedules of Investments and is included in the Funds' investments, at value in the Funds' Statements of Assets and Liabilities. The Funds deposited their securities lending income into a reserve account from July 2008 through January 2009, which reserve may be used to cover additional losses by the Funds on their interest in Atlantic East Funding Trust, LLC after applying amounts payable from the Funds’ transfer agent and administrator. As a result of these securities lending income reserves, the Funds did not recognize income from their securities lending activity for financial reporting purposes from July 2008 through January 2009
Page 34
Baird Funds, Inc.
Notes to the Financial Statements June 30, 2009 (Unaudited) |
6. | SECURITIES LENDING (cont.) |
but are required to recognize and distribute such income for tax purposes. The amounts in the securities lending reserve at June 30, 2009 are $14,118 for the Baird LargeCap Fund and $36,183 for the Baird MidCap Fund. These amounts are not included as income from securities lending or as investment income on the Funds' Statements of Operations. Upon the liquidation of the Funds’ interest in Atlantic East Funding Trust, LLC, any excess securities lending income reserves (after applying the reserves and amounts payable from the Funds’ transfer agent and administrator to cover losses) will then be recognized as income to the Funds. The Funds discontinued depositing their securities lending income into a reserve in February 2009. From February 2009 through June 2009, the Funds recognized income from their securities lending activity. Interest income earned on collateral investments and recognized by the Funds during the six months ended June 30, 2009 for the Baird LargeCap Fund and Baird MidCap Fund was $6,051 and $13,003, respectively. Shares of the Reserve Primary Fund are priced at $1.00 per share based on the fair value of the shares of that fund plus an agreement to contribute additional amounts to be applied to those shares by the Funds’ transfer agent and administrator. This price for the Reserve Primary Fund shares is reflected in the Funds' Schedules of Investments and is included in the Funds' investments, at value in the Funds' Statements of Assets and Liabilities.
7. | LINE OF CREDIT |
The Corporation maintains an uncommitted, senior secured line of credit (“LOC”) with U.S. Bank, N.A. (the “Bank”) to provide the Funds a temporary liquidity source to meet unanticipated redemptions. Under the terms of the LOC, borrowings for each Fund are limited to one-third of the total assets (including the amount borrowed) of the respective Fund, or as otherwise indicated within the Funds’ agreement with the Bank. The Bank charges interest at the Bank’s Prime Rate less 1% (weighted average rate of 2.25% for the six months of 2009). For the six months ended June 30, 2009, the Baird LargeCap Fund and Baird MidCap Fund did not borrow on the LOC.
8. | DISTRIBUTION AND SHAREHOLDER SERVICE PLAN |
The Funds have adopted a distribution and shareholder service plan (the “Plan”) pursuant to Rule 12b-1 under the 1940 Act. The Plan allows the Funds to compensate the Distributor for the costs incurred in distributing the Funds’ Investor Class Shares, including amounts paid to brokers or dealers, at an annual rate not to exceed 0.25% of the average daily net assets of the Funds’ Investor Class Shares. The Baird LargeCap Fund and Baird MidCap Fund incurred $335 and $1,862, respectively, in fees pursuant to the Plan during the six months ended June 30, 2009.
9. | SUBSEQUENT EVENT |
In July 2009, FAF Advisors, Inc. and its affiliate, the Bank, returned to the Funds fees they earned in respect of the Funds’ securities lending activity from December 3, 2008 through May 21, 2009 because during that period the Bank may have been deemed to be indirectly affiliated with the Funds. Amounts returned to the Funds are approximately $4,410 for the Baird Large Cap Fund and $9,047 for the Baird MidCap Fund. The Funds are recognizing as income the securities lending fees returned to them. The additional income being recognized by the Funds will be included in the Funds’ year-end income distributions.
Page 35
Additional Information
Proxy Voting
A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling toll free, 1-866-44BAIRD, or by accessing the Funds’ website at www.bairdfunds.com; and by accessing the SEC’s website at www.sec.gov.
Each Fund’s proxy voting record for the most recent 12-month period ended June 30 is available without charge, upon request, by calling toll free, 1-866-44BAIRD, or by accessing the Funds’ website at www.bairdfunds.com; and by accessing the SEC’s website at www.sec.gov.
Portfolio Holdings Disclosure
The Funds file a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the SEC website at www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-732-0330. The Funds’ Forms N-Q may also be obtained by calling toll-free 1-866-44BAIRD.
Page 36
(This Page Intentionally Left Blank.)
Baird Funds, Inc.
c/o U.S. Bancorp Fund Services, LLC
P.O. Box 701
Milwaukee, WI 53201-0701
1-866-44BAIRD
Board of Directors
G. Frederick Kasten, Jr. (Chairman)
John W. Feldt
Frederick P. Stratton, Jr.
Cory L. Nettles
Marlyn J. Spear
Investment Advisor and Distributor
Robert W. Baird & Co. Incorporated
777 East Wisconsin Avenue
Milwaukee, WI 53202
Administrator and Transfer Agent
U.S. Bancorp Fund Services, LLC
P.O. Box 701
615 East Michigan Street
Milwaukee, WI 53202
Custodian
U.S. Bank, N.A.
1555 N. RiverCenter Drive, Suite 302
Milwaukee, WI 53212
Legal Counsel
Godfrey & Kahn, S.C.
780 North Water Street
Milwaukee, WI 53202
Independent Registered Public Accounting Firm
Grant Thornton LLP
175 West Jackson Boulevard, 13th Floor
Chicago, IL 60604
Semi-Annual Report
RiverFront Long-Term Growth Fund
TABLE OF CONTENTS
Page | |
RiverFront Long-Term Growth Fund | 1 |
Additional Information on Fund Expenses | 9 |
Statement of Assets and Liabilities | 11 |
Statement of Operations | 12 |
Statement of Changes in Net Assets | 13 |
Financial Highlights | 14 |
Notes to the Financial Statements | 16 |
Additional Information | 23 |
This report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.
Cautionary Note on Analyses, Opinions and Outlooks: In this report we offer analyses and opinions on the performance of individual securities, companies, industries, sectors, markets, interest rates and governmental policies, including predictions, forecasts and outlooks regarding possible future events. These can generally be identified as such because the context of the statements may include such words as “believe,” “should,” “will,” “expects,” “anticipates,” “hopes” and words of similar effect. These statements reflect the portfolio managers’ good faith beliefs and judgments and involve risks and uncertainties, including the risk that the portfolio managers’ analyses, opinions and outlooks are or will prove to be inaccurate. It is inherently difficult to correctly assess and explain the performance of particular securities, sectors, markets, interest rate movements, governmental actions or general economic trends and conditions, and many unforeseen factors contribute to the performance of Baird Funds. Investors are, therefore, cautioned not to place undue reliance on subjective judgments contained in this report.
RiverFront Long-Term Growth Fund
A June 30, 2009 summary of the Fund’s top 10 holdings and asset allocation is shown below.
Top 10 Holdings* | Asset Allocation** | ||
Vanguard Europe Pacific ETF | 10.63% | ||
Vanguard Emerging Markets ETF | 8.46% | ||
iShares MSCI EAFE Index Fund | 4.20% | ||
iShares S&P Latin | |||
American 40 Index Fund | 2.92% | ||
iShares S&P SmallCap 600 Index Fund | 2.79% | ||
PowerShares DB Commodity | |||
Index Tracking Fund | 2.77% | ||
PowerShares DB Agriculture Fund | 2.57% | ||
iShares MSCI Emerging Markets Index | 2.20% | ||
Vanguard FTSE All World | |||
ex-US Small-Cap Index ETF | 2.06% | ||
iShares Dow Jones U.S. | |||
Broker-Dealers Index Fund | 1.67% | ||
Net Assets: | $16,896,270 | ||
Portfolio Turnover Rate | |||
(not annualized): | 32.9% | ||
Number of Equity Holdings: | 93 | ||
Annualized Portfolio Expense Ratio:*** | |||
INSTITUTIONAL CLASS: | 0.90% | ||
INVESTOR CLASS: | 1.15% | **** | |
* | The Fund’s portfolio composition is subject to change and there is no assurance that the Fund will continue to hold any particular security. Percentages shown relate to the Fund’s total net assets as of June 30, 2009. |
** | Percentages shown in parentheses may not add up to 100% due to rounding. |
*** | The Advisor has contractually agreed to limit the Fund’s total annual fund operating expenses to 0.90% of average daily net assets for the Institutional Class shares and 1.15% of average daily net assets for the Investor Class shares, at least through December 31, 2011. |
**** | Includes 0.25% 12b-1 fee. |
Page 1
RiverFront Long-Term Growth Fund
Total Returns(1)
For the Periods Ended June 30, 2009 | Six Months | Since Inception(2) |
Institutional Class Shares | 5.53% | 11.66% |
Investor Class Shares | 5.44% | 11.43% |
S&P 500® Index(3) | 3.16% | -0.28% |
(1) | Represents actual, non-annualized total returns for the periods ended June 30, 2009. |
(2) | For the period from October 28, 2008 (commencement of operations) through June 30, 2009. |
(3) | The S&P 500® is an index of 500 stocks chosen for market size, liquidity and industry grouping, among other factors. The S&P 500® is designed to be a leading indicator of U.S. equities and is meant to reflect the risk/return characteristics of the large cap universe. Companies included in the index are selected by the S&P Index Committee, a team of analysts and economists at Standard & Poor’s. The S&P 500® is a market value weighted index – each stock’s weight in the index is proportionate to its market value. A direct investment in an index is not possible. |
The returns shown in the table above reflect reinvestment of dividends and/or capital gains distributions in additional shares. The returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Past performance does not guarantee future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.
For information about the performance of the Fund as of the most recent month-end, please call 1-866-44BAIRD or visit www.bairdfunds.com. Mutual fund performance changes over time and current performance may be lower or higher than that stated.
Page 2
RiverFront Long-Term Growth Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Shares | Value | ||||||
COMMON STOCKS – 39.6% | |||||||
Aerospace & Defense – 1.7% | |||||||
1,528 | L-3 Communications | ||||||
Holdings, Inc. | $ | 106,013 | |||||
760 | Lockheed Martin | ||||||
Corporation | 61,294 | ||||||
2,263 | United Technologies | ||||||
Corporation | 117,585 | ||||||
284,892 | |||||||
Beverages – 0.9% | |||||||
3,063 | The Coca-Cola Company | 146,993 | |||||
Capital Markets – 0.7% | |||||||
7,029 | Invesco Limited f | 125,257 | |||||
Chemicals – 1.0% | |||||||
1,193 | Praxair, Inc. | 84,787 | |||||
3,544 | Sensient Technologies | ||||||
Corporation | 79,988 | ||||||
164,775 | |||||||
Commercial Banks – 0.5% | |||||||
1,852 | Cullen/Frost Bankers, Inc. | 85,414 | |||||
Commercial Services & Supplies – 0.4% | |||||||
1,707 | Manpower Inc. | 72,274 | |||||
Communications Equipment – 1.9% | |||||||
9,173 | Cisco Systems, Inc.* | 170,985 | |||||
3,155 | Harris Corporation | 89,476 | |||||
2,812 | Polycom, Inc.* | 56,999 | |||||
317,460 | |||||||
Computers & Peripherals – 2.5% | |||||||
1,509 | Apple Inc.* | 214,927 | |||||
1,828 | Hewlett-Packard Company | 70,652 | |||||
1,403 | International | ||||||
Business Machines | |||||||
Corporation (IBM) | 146,501 | ||||||
432,080 | |||||||
Construction & Engineering – 0.7% | |||||||
2,230 | Fluor Corporation | 114,377 | |||||
Containers & Packaging – 0.9% | |||||||
3,243 | Ball Corporation | 146,454 | |||||
Distributors – 0.3% | |||||||
1,834 | WESCO | ||||||
International, Inc.* | 45,923 | ||||||
Diversified Financial Services – 0.6% | |||||||
4,895 | NASDAQ OMX | ||||||
Group, Inc.* | 104,312 | ||||||
Diversified Telecommunication Services – 0.3% | |||||||
1,749 | Verizon | ||||||
Communications Inc. | 53,747 | ||||||
Electric Utilities – 0.3% | |||||||
4,758 | TECO Energy, Inc. | 56,763 | |||||
Energy Equipment & Services – 1.9% | |||||||
3,908 | Hornbeck Offshore | ||||||
Services, Inc.* | 83,592 | ||||||
1,686 | National-Oilwell Varco Inc.* | 55,065 | |||||
2,960 | Patterson-UTI Energy, Inc. | 38,065 | |||||
1,288 | Schlumberger Limited f | 69,694 | |||||
4,563 | Superior Energy | ||||||
Services, Inc.* | 78,803 | ||||||
325,219 | |||||||
Food & Staples Retailing – 1.5% | |||||||
2,413 | CVS Caremark Corporation | 76,902 | |||||
3,697 | Wal-Mart Stores, Inc. | 179,083 | |||||
255,985 | |||||||
Food Products – 1.0% | |||||||
3,917 | The Hain Celestial | ||||||
Group Inc.* | 61,144 | ||||||
2,830 | H.J. Heinz Company | 101,031 | |||||
162,175 | |||||||
Health Care Providers & Services – 3.4% | |||||||
2,476 | DaVita, Inc.* | 122,463 | |||||
1,931 | Express Scripts, Inc.* | 132,756 | |||||
2,317 | Henry Schein, Inc.* | 111,100 | |||||
979 | Johnson & Johnson | 55,607 |
The accompanying notes are an integral part of these financial statements.
Page 3
RiverFront Long-Term Growth Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Shares | Value | ||||||
COMMON STOCKS – 39.6% (cont.) | |||||||
Health Care Providers & Services – 3.4% (cont.) | |||||||
2,165 | Laboratory Corporation | ||||||
of America Holdings* | $ | 146,766 | |||||
568,692 | |||||||
Hotels, Restaurants & Leisure – 1.2% | |||||||
4,136 | Jack in the Box Inc.* | 92,853 | |||||
3,770 | Penn National | ||||||
Gaming, Inc.* | 109,745 | ||||||
202,598 | |||||||
Household Products – 1.5% | |||||||
2,394 | Church & Dwight Co., Inc. | 130,018 | |||||
2,465 | The Procter & | ||||||
Gamble Company | 125,962 | ||||||
255,980 | |||||||
Insurance – 1.9% | |||||||
1,936 | Aflac, Inc. | 60,190 | |||||
6,368 | HCC Insurance | ||||||
Holdings, Inc. | 152,896 | ||||||
7,632 | The Progressive | ||||||
Corporation* | 115,319 | ||||||
328,405 | |||||||
IT Services – 0.8% | |||||||
3,049 | Fiserv, Inc.* | 139,339 | |||||
Leisure Equipment & Products – 0.7% | |||||||
4,639 | Hasbro, Inc. | 112,449 | |||||
Machinery – 1.4% | |||||||
3,119 | Dover Corporation | 103,208 | |||||
3,462 | Illinois Tool Works Inc. | 129,271 | |||||
232,479 | |||||||
Multiline Retail – 0.7% | |||||||
2,814 | Dollar Tree, Inc.* | 118,469 | |||||
Multimedia – 0.5% | |||||||
1,636 | Factset Research | ||||||
Systems Inc. | 81,587 | ||||||
Multi-Utilities & Unregulated Power – 1.1% | |||||||
3,152 | Dominion Resources, Inc. | 105,340 | |||||
4,202 | MDU Resources | ||||||
Group, Inc. | 79,712 | ||||||
185,052 | |||||||
Oil & Gas – 4.1% | |||||||
1,296 | Chevron Corporation | 85,860 | |||||
2,066 | Cimarex Energy Co. | 58,550 | |||||
2,272 | Exxon Mobil Corporation | 158,836 | |||||
4,467 | Forest Oil Corporation* | 66,648 | |||||
4,245 | Marathon Oil Corporation | 127,902 | |||||
3,716 | ONEOK, Inc. | 109,585 | |||||
2,180 | XTO Energy, Inc. | 83,145 | |||||
690,526 | |||||||
Pharmaceuticals – 1.7% | |||||||
5,082 | Bristol-Myers | ||||||
Squibb Company | 103,216 | ||||||
5,648 | Endo Pharmaceuticals | ||||||
Holdings Inc.* | 101,212 | ||||||
1,960 | Wyeth | 88,964 | |||||
293,392 | |||||||
Real Estate Investment Trusts – 0.5% | |||||||
3,929 | Highwoods Properties, Inc. | 87,892 | |||||
Software – 0.6% | |||||||
4,647 | Amdocs Limited* f | 99,678 | |||||
Specialty Retail – 1.9% | |||||||
3,525 | Best Buy Co., Inc. | 118,052 | |||||
2,963 | Lowe’s Companies, Inc. | 57,512 | |||||
6,521 | PetSmart, Inc. | 139,941 | |||||
315,505 | |||||||
Tobacco – 0.5% | |||||||
2,146 | Philip Morris | ||||||
International Inc. | 93,609 | ||||||
Total Common Stocks | |||||||
(Cost $6,330,485) | 6,699,752 |
The accompanying notes are an integral part of these financial statements.
Page 4
RiverFront Long-Term Growth Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Shares | Value | ||||||
EXCHANGE-TRADED FUNDS – 54.6% | |||||||
Basic Materials – 0.9% | |||||||
3,556 | iShares Dow Jones | ||||||
U.S. Basic Materials | |||||||
Sector Index Fund | $ | 154,295 | |||||
Commodity – 8.3% | |||||||
8,044 | iPath Dow Jones-UBS | ||||||
Natural Gas Total | |||||||
Return Sub-Index ETN* | 134,335 | ||||||
17,085 | PowerShares DB | ||||||
Agriculture Fund | 434,813 | ||||||
10,085 | PowerShares DB | ||||||
Base Metals Fund | 151,981 | ||||||
20,675 | PowerShares DB | ||||||
Commodity Index | |||||||
Tracking Fund | 467,669 | ||||||
2,411 | SPDR Gold Trust* | 219,835 | |||||
1,408,633 | |||||||
Energy – 0.9% | |||||||
4,731 | SPDR S&P Oil & | ||||||
Gas Exploration & | |||||||
Production ETF | 150,067 | ||||||
Financial Services – 1.7% | |||||||
11,003 | iShares Dow Jones | ||||||
U.S. Broker-Dealers | |||||||
Index Fund | 281,677 | ||||||
Health & Biotechnology – 2.5% | |||||||
3,960 | iShares U.S. Dow Jones | ||||||
Medical Equipment Index | 175,230 | ||||||
2,234 | iShares Dow Jones U.S. | ||||||
Healthcare Providers Index | 86,232 | ||||||
3,333 | PowerShares Dynamic | ||||||
Healthcare Sector Portfolio* | 64,827 | ||||||
2,051 | SPDR S&P Biotech ETF | 104,006 | |||||
430,295 | |||||||
International Equity – 32.8% | |||||||
3,686 | iShares MSCI All | ||||||
Country Asia ex-Japan | |||||||
Index Fund | 161,373 | ||||||
6,928 | iShares MSCI Canada | ||||||
Index Fund | 148,398 | ||||||
15,484 | iShares MSCI EAFE | ||||||
Index Fund | 709,322 | ||||||
11,546 | iShares MSCI Emerging | ||||||
Markets Index | 372,128 | ||||||
8,422 | iShares MSCI Pacific | ||||||
ex-Japan Index Fund | 266,725 | ||||||
14,210 | iShares S&P Latin | ||||||
American 40 Index Fund | 493,655 | ||||||
14,321 | PowerShares | ||||||
International Dividend | |||||||
Achievers Portfolio | 163,832 | ||||||
44,903 | Vanguard Emerging | ||||||
Markets ETF | 1,428,813 | ||||||
62,554 | Vanguard Europe | ||||||
Pacific ETF | 1,795,300 | ||||||
5,539,546 | |||||||
Internet & Telecom – 0.9% | |||||||
3,587 | Vanguard Information | ||||||
Technology Index ETF | 152,734 | ||||||
Large Cap – 1.0% | |||||||
4,664 | PowerShares QQQ | 169,676 | |||||
Mid Cap – 0.3% | |||||||
970 | iShares Morningstar Mid | ||||||
Growth Index Fund | 58,530 | ||||||
Small Cap – 4.9% | |||||||
10,599 | iShares S&P SmallCap | ||||||
600 Index Fund | 471,338 | ||||||
5,289 | Vanguard FTSE All World | ||||||
ex-U.S. Small-Cap ETF* | 347,752 | ||||||
819,090 |
The accompanying notes are an integral part of these financial statements.
Page 5
RiverFront Long-Term Growth Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Shares | Value | ||||||
EXCHANGE-TRADED FUNDS – 54.6% (cont.) | |||||||
Technology – 0.4% | |||||||
1,745 | iShares S&P North | ||||||
American Technology- | |||||||
Software Index Fund* | $ | 67,200 | |||||
Total Exchange- | |||||||
Traded Funds | |||||||
(Cost $8,216,171) | 9,231,743 | ||||||
SHORT-TERM INVESTMENTS – 4.7% | |||||||
Money Market Fund – 4.7% | |||||||
786,492 | Fidelity Institutional | ||||||
Government Portfolio | 786,492 | ||||||
Total Short-Term | |||||||
Investments | |||||||
(Cost $786,492) | 786,492 | ||||||
Total Investments | |||||||
(Cost $15,333,148) – | |||||||
98.9% | 16,717,987 | ||||||
Other Assets in Excess | |||||||
of Liabilities – 1.1% | 178,283 | ||||||
TOTAL NET | |||||||
ASSETS – 100.0% | $ | 16,896,270 |
* | Non-Income Producing |
f | Foreign Security |
The accompanying notes are an integral part of these financial statements.
Page 6
RiverFront Long-Term Growth Fund
Schedule of Investments June 30, 2009 (Unaudited) |
SFAS 157 – Summary of Fair Value Exposure at June 30, 2009 (Unaudited)
As adopted by the Fund, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“SFAS 157”) defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. Under SFAS 157, various inputs are used in determining the value of the Fund’s investments. These inputs are summarized into three broad levels and described below:
Level 1 – | Quoted prices in active markets for identical securities. |
Level 2 – | Other significant observable inputs (including quoted prices for similar securities, quoted prices in inactive markets, interest rates, yield curves, prepayment speeds, credit risk, default rates, inputs corroborated by observable market data, etc.) |
Level 3 – | Significant unobservable inputs (including the Fund’s own assumptions about the assumptions that market participants would use in pricing the security) |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Fund’s investments as of June 30, 2009:
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Equity | ||||||||||||||||
Common Stocks | ||||||||||||||||
Aerospace & Defense | $ | 284,892 | $ | — | $ | — | $ | 284,892 | ||||||||
Beverages | 146,993 | — | — | 146,993 | ||||||||||||
Capital Markets | 125,257 | — | — | 125,257 | ||||||||||||
Chemicals | 164,775 | — | — | 164,775 | ||||||||||||
Commercial Banks | 85,414 | — | — | 85,414 | ||||||||||||
Commercial Services & Supplies | 72,274 | — | — | 72,274 | ||||||||||||
Communications Equipment | 317,460 | — | — | 317,460 | ||||||||||||
Computers & Peripherals | 432,080 | — | — | 432,080 | ||||||||||||
Construction & Engineering | 114,377 | — | — | 114,377 | ||||||||||||
Containers & Packaging | 146,454 | — | — | 146,454 | ||||||||||||
Distributors | 45,923 | — | — | 45,923 | ||||||||||||
Diversified Financial Services | 104,312 | — | — | 104,312 | ||||||||||||
Diversified Telecommunication Services | 53,747 | — | — | 53,747 | ||||||||||||
Electric Utilities | 56,763 | — | — | 56,763 | ||||||||||||
Energy Equipment & Services | 325,219 | — | — | 325,219 | ||||||||||||
Food & Staples Retailing | 255,985 | — | — | 255,985 | ||||||||||||
Food Products | 162,175 | — | — | 162,175 |
Page 7
RiverFront Long-Term Growth Fund
Schedule of Investments June 30, 2009 (Unaudited) |
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Health Care Providers & Services | 568,692 | — | — | 568,692 | ||||||||||||
Hotels, Restaurants & Leisure | 202,598 | — | — | 202,598 | ||||||||||||
Household Products | 255,980 | — | — | 255,980 | ||||||||||||
Insurance | 328,405 | — | — | 328,405 | ||||||||||||
IT Services | 139,339 | — | — | 139,339 | ||||||||||||
Leisure Equipment & Products | 112,449 | — | — | 112,449 | ||||||||||||
Machinery | 232,479 | — | — | 232,479 | ||||||||||||
Multiline Retail | 118,469 | — | — | 118,469 | ||||||||||||
Multimedia | 81,587 | — | — | 81,587 | ||||||||||||
Multi-Utilities & Unregulated Power | 185,052 | — | — | 185,052 | ||||||||||||
Oil & Gas | 690,526 | — | — | 690,526 | ||||||||||||
Pharmaceuticals | 293,392 | — | — | 293,392 | ||||||||||||
Real Estate | 87,892 | — | — | 87,892 | ||||||||||||
Software | 99,678 | — | — | 99,678 | ||||||||||||
Specialty Retail | 315,505 | — | — | 315,505 | ||||||||||||
Tobacco | 93,609 | — | — | 93,609 | ||||||||||||
Total Common Stocks | 6,699,752 | — | — | 6,699,752 | ||||||||||||
Exchange-Traded Funds | ||||||||||||||||
Basic Materials | 154,295 | — | — | 154,295 | ||||||||||||
Commodity | 1,408,633 | — | — | 1,408,633 | ||||||||||||
Energy | 150,067 | — | — | 150,067 | ||||||||||||
Financial Services | 281,677 | — | — | 281,677 | ||||||||||||
Health & Biotechnology | 430,295 | — | — | 430,295 | ||||||||||||
International Equity | 5,539,546 | — | — | 5,539,546 | ||||||||||||
Internet & Telecom | 152,734 | — | — | 152,734 | ||||||||||||
Large Cap | 169,676 | — | — | 169,676 | ||||||||||||
Mid Cap | 58,530 | — | — | 58,530 | ||||||||||||
Small Cap | 819,090 | — | — | 819,090 | ||||||||||||
Technology | 67,200 | — | — | 67,200 | ||||||||||||
Total Exchange-Traded Funds | 9,231,743 | — | — | 9,231,743 | ||||||||||||
Total Equity | 15,931,495 | — | — | 15,931,495 | ||||||||||||
Short-Term Investments | ||||||||||||||||
Money Market Mutual Funds | 786,492 | — | — | 786,492 | ||||||||||||
Total Short-Term Investments | 786,492 | — | — | 786,492 | ||||||||||||
Total Investments in Securities | $ | 16,717,987 | $ | — | $ | — | $ | 16,717,987 |
Page 8
RiverFront Long-Term Growth Fund
Additional Information on Fund Expenses June 30, 2009 (Unaudited) |
Example
As a shareholder of a mutual fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments, reinvested dividends, or other distributions; redemption fees; and exchange fees; and (2) ongoing costs, such as management fees; distribution and/or service (12b-1) fees; and other fund expenses. Although the Fund does not charge any sales loads, redemption fees, or other transaction fees, you will be assessed fees for outgoing wire transfers, returned checks and stop payment orders at prevailing rates charged by U.S. Bancorp Fund Services, LLC, the Fund’s transfer agent. If you request that a redemption be made by wire transfer, currently the Fund’s transfer agent charges a $15.00 fee.
This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (1/1/09 – 6/30/09).
Actual Expenses
The third and fourth columns of the following table provide information about account values based on actual returns and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 – 8.6), then multiply the result by the number in the fourth column entitled “Expenses Paid During Period’’ to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The fifth and sixth columns of the following table provide information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratios and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other mutual funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the sixth column of the table (entitled “Expenses Paid During Period”) is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different mutual funds. In addition, if these transactional costs were included, your costs could have been higher.
Page 9
RiverFront Long-Term Growth Fund
Additional Information on Fund Expenses June 30, 2009 (Unaudited) |
Actual vs. Hypothetical Returns
For the Six Months Ended June 30, 2009
Hypothetical (5% return | |||||||||||
Actual | before expenses) | ||||||||||
Fund’s | Beginning | Ending | Expenses | Ending | Expenses | ||||||
Annualized | Account | Account | Paid | Account | Paid | ||||||
Expense | Value | Value | During | Value | During | ||||||
Ratio(1) | 1/1/09 | 6/30/09 | Period(1) | 6/30/09 | Period(1) | ||||||
RiverFront Long-Term | |||||||||||
Growth Fund | |||||||||||
Institutional Class | 0.90% | $1,000.00 | $1,055.30 | $4.59 | $1,020.33 | $4.51 | |||||
Investor Class | 1.15% | $1,000.00 | $1,054.40 | $5.86 | $1,019.09 | $5.76 |
(1) | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by 181 days and divided by 365 to reflect the one-half year period. |
Page 10
RiverFront Long-Term Growth Fund
Statement of Assets and Liabilities June 30, 2009 (Unaudited) |
ASSETS: | ||||
Investments, at value | $ | 16,717,987 | ||
(cost $15,333,148) | ||||
Cash | 1,878 | |||
Dividends receivable | 6,751 | |||
Interest receivable | 239 | |||
Receivable for investments sold | 77,672 | |||
Receivable for fund shares sold | 259,800 | |||
Other assets | 8,912 | |||
Total assets | 17,073,239 | |||
LIABILITIES: | ||||
Payable to Advisor and Distributor | 242 | |||
Payable for securities purchased | 154,890 | |||
Payable for fund shares repurchased | 4 | |||
Accrued expenses and other liabilities | 21,833 | |||
Total liabilities | 176,969 | |||
NET ASSETS | $ | 16,896,270 | ||
NET ASSETS CONSIST OF: | ||||
Capital stock | $ | 15,873,202 | ||
Accumulated undistributed net investment income | 45,040 | |||
Accumulated net realized loss on investments sold | (406,811 | ) | ||
Net unrealized appreciation on investments | 1,384,839 | |||
NET ASSETS | $ | 16,896,270 | ||
INSTITUTIONAL CLASS SHARES | ||||
Net Assets | $ | 13,881,714 | ||
Shares outstanding | ||||
($0.01 par value, unlimited shares authorized) | 1,253,997 | |||
Net asset value, offering and redemption price per share | $ | 11.07 | ||
INVESTOR CLASS SHARES | ||||
Net Assets | $ | 3,014,556 | ||
Shares outstanding | ||||
($0.01 par value, unlimited shares authorized) | 272,837 | |||
Net asset value, offering and redemption price per share | $ | 11.05 |
The accompanying notes are an integral part of these financial statements.
Page 11
RiverFront Long-Term Growth Fund
Statement of Operations Six Months Ended June 30, 2009 (Unaudited) |
INVESTMENT INCOME: | ||||
Dividends | $ | 80,230 | ||
Interest | 2,443 | |||
Other income | 9,813 | |||
Total investment income | 92,486 | |||
EXPENSES: | ||||
Investment advisory fees | 35,224 | |||
Administration fees | 1,343 | |||
Shareholder servicing fees | 7,648 | |||
Fund accounting fees | 1,150 | |||
Professional fees | 14,731 | |||
Federal and state registration | 7,220 | |||
Directors fees | 13,044 | |||
Custody fees | 11,574 | |||
Reports to shareholders | 5,253 | |||
Distribution fees – Investor Class Shares (Note 7) | 1,356 | |||
Miscellaneous expenses | 44 | |||
Total expenses | �� | 98,587 | ||
Expense reimbursement by Advisor (Note 5) | (48,459 | ) | ||
Total expenses | 50,128 | |||
NET INVESTMENT INCOME | 42,358 | |||
REALIZED AND UNREALIZED GAIN/LOSS ON INVESTMENTS: | ||||
Net realized loss on investments | (311,933 | ) | ||
Change in unrealized appreciation/depreciation on investments | 1,249,632 | |||
Net realized and unrealized gain on investments | 937,699 | |||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 980,057 |
The accompanying notes are an integral part of these financial statements.
Page 12
RiverFront Long-Term Growth Fund
Statement of Changes in Net Assets |
Six Months Ended | October 28, 2008(1) | |||||||
June 30, 2009 | through | |||||||
(Unaudited) | December 31, 2008 | |||||||
OPERATIONS: | ||||||||
Net investment income | $ | 42,358 | $ | 65,058 | ||||
Net realized loss on investments | (311,933 | ) | (94,878 | ) | ||||
Change in unrealized appreciation/depreciation on investments | 1,249,632 | 135,207 | ||||||
Net increase in net assets resulting from operations | 980,057 | 105,387 | ||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||
Proceeds from shares sold | 9,788,703 | 7,978,984 | ||||||
Shares issued to holders in reinvestments of dividends | — | 56,642 | ||||||
Cost of shares redeemed | (1,737,195 | ) | (213,933 | ) | ||||
Net increase in net assets resulting | ||||||||
from capital share transactions | 8,051,508 | 7,821,693 | ||||||
DISTRIBUTIONS TO | ||||||||
INSTITUTIONAL CLASS SHAREHOLDERS: | ||||||||
From net investment income | — | (59,302 | ) | |||||
DISTRIBUTIONS TO | ||||||||
INVESTOR CLASS SHAREHOLDERS: | ||||||||
From net investment income | — | (3,073 | ) | |||||
TOTAL INCREASE IN NET ASSETS | 9,031,565 | 7,864,705 | ||||||
NET ASSETS: | ||||||||
Beginning of period | 7,864,705 | — | ||||||
End of period (including undistributed net investment | ||||||||
income of $45,040 and $2,682, respectively) | $ | 16,896,270 | $ | 7,864,705 |
(1) | Commencement of operations. |
The accompanying notes are an integral part of these financial statements.
Page 13
RiverFront Long-Term Growth Fund
Financial Highlights |
Institutional Class | ||||||||
Six Months Ended | October 28, 2008(1) | |||||||
June 30, 2009 | through | |||||||
(Unaudited) | December 31, 2008 | |||||||
Per Share Data: | ||||||||
Net asset value, beginning of period | $ | 10.49 | $ | 10.00 | ||||
Income from investment operations: | ||||||||
Net investment income(2) | 0.04 | 0.12 | ||||||
Net realized and unrealized gains on investments | 0.54 | 0.46 | ||||||
Total from investment operations | 0.58 | 0.58 | ||||||
Less distributions: | ||||||||
Distributions from net investment income | — | (0.09 | ) | |||||
Net asset value, end of period | $ | 11.07 | $ | 10.49 | ||||
Total return | 5.53 | %(3) | 5.81 | %(3) | ||||
Supplemental data and ratios: | ||||||||
Net assets, end of period | $ | 13,881,714 | $ | 7,438,725 | ||||
Ratio of expenses to average net assets | 0.90 | %(4) | 0.90 | %(4) | ||||
Ratio of expenses to average net assets (before waivers) | 1.79 | %(4) | 4.97 | %(4) | ||||
Ratio of net investment income to average net assets | 0.80 | %(4) | 7.55 | %(4) | ||||
Ratio of net investment income to average net assets (before waivers) | (0.09 | %)(4) | 3.48 | %(4) | ||||
Portfolio turnover rate(5) | 32.9 | %(3) | 13.3 | %(3) |
(1) | Commencement of operations. |
(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. |
The accompanying notes are an integral part of these financial statements.
Page 14
RiverFront Long-Term Growth Fund
Financial Highlights |
Investor Class | ||||||||
Six Months Ended | October 28, 2008(1) | |||||||
June 30, 2009 | through | |||||||
(Unaudited) | December 31, 2008 | |||||||
Per Share Data: | ||||||||
Net asset value, beginning of period | $ | 10.49 | $ | 10.00 | ||||
Income from investment operations: | ||||||||
Net investment income(2) | 0.03 | 0.12 | ||||||
Net realized and unrealized gains on investments | 0.53 | 0.46 | ||||||
Total from investment operations | 0.56 | 0.58 | ||||||
Less distributions: | ||||||||
Distributions from net investment income | — | (0.09 | ) | |||||
Net asset value, end of period | $ | 11.05 | $ | 10.49 | ||||
Total return | 5.44 | %(3) | 5.68 | %(3) | ||||
Supplemental data and ratios: | ||||||||
Net assets, end of period | $ | 3,014,556 | $ | 425,980 | ||||
Ratio of expenses to average net assets | 1.15 | %(4) | 1.15 | %(4) | ||||
Ratio of expenses to average net assets (before waivers) | 2.04 | %(4) | 5.22 | %(4) | ||||
Ratio of net investment income to average net assets | 0.55 | %(4) | 7.30 | %(4) | ||||
Ratio of net investment income to average net assets (before waivers) | (0.34 | %)(4) | 3.23 | %(4) | ||||
Portfolio turnover rate(5) | 32.9 | %(3) | 13.3 | %(3) |
(1) | Commencement of operations. |
(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. |
The accompanying notes are an integral part of these financial statements.
Page 15
RiverFront Long-Term Growth Fund
Notes to the Financial Statements June 30, 2009 (Unaudited) |
1. | ORGANIZATION |
Baird Funds, Inc. (the “Corporation”) was incorporated on June 9, 2000 as a Wisconsin corporation and is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The accompanying financial statements include the RiverFront Long-Term Growth Fund (“Fund”), one of the eight portfolios comprising the Corporation. Pursuant to the 1940 Act, the Fund is a “diversified” series of the Corporation. The investment advisor to the Fund is Robert W. Baird & Co. Incorporated (“Baird” or the “Advisor”). The sub-advisor to the Fund is RiverFront Investment Group, LLC (“RiverFront”).
The Fund commenced operations with the sale of both Institutional and Investor Class Shares on October 28, 2008. The Institutional Class Shares are not subject to a distribution and service (12b-1) fee, while the Investor Class Shares are subject to a distribution and service (12b-1) fee up to 0.25%.
The Fund seeks long-term capital appreciation through investments primarily in equity securities of domestic and foreign companies across varying market capitalization ranges, styles and economic sectors.
On June 30, 2009, the Advisor held 60% of the Fund through the Advisor’s participant-directed retirement and deferred compensation plans.
2. | SIGNIFICANT ACCOUNTING POLICIES |
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with accounting principles generally accepted in the United States of America.
a) | Investment Valuation – Section 2(a)(41) of the 1940 Act, together with the rules and interpretations of the SEC, requires the Fund, in computing NAV, to value its portfolio securities using market quotations when they are “readily available.” When market quotations are not readily available (e.g., because there is no regular market quotation for such securities, the market for such security is limited, the validity of quotations is questionable or, for debt securities, IDC does not provide a price), the Board of Directors of the Corporation must value the securities at “fair value determined in good faith.” The Board has delegated such responsibility to the Advisor pursuant to pricing policies and procedures that the Board has adopted and regularly reviews. |
In general, the “fair value” of a security means the amount that the Fund might reasonably expect to receive for the security upon its current sale. Pursuant to Statement of Financial Accounting Standards No. 157 (“SFAS 157), “fair value” means “the price that would be received to sell [a security] in an orderly transaction between market participants at the measurement date.” |
Consistent with Section 2(a)(41) of the 1940 Act and SFAS 157, the Fund prices its securities as follows: Common stocks that are listed on a securities exchange (other than NASDAQ) are valued at the last quoted sales price. Securities traded on NASDAQ are valued at the NASDAQ Official Closing Price. Price information on listed stocks is taken from the exchange where the security is primarily traded. Securities that were not traded on the valuation date, |
Page 16
RiverFront Long-Term Growth Fund
Notes to the Financial Statements June 30, 2009 (Unaudited) |
2. | SIGNIFICANT ACCOUNTING POLICIES (cont.) |
as well as stocks that are not listed on an exchange, including NASDAQ, are valued at the average of the current bid and asked price. Debt securities are valued by an independent pricing service using valuation methods that are designed to represent fair value, such as matrix pricing and other analytical pricing models, market transactions and dealer quotations. Debt securities purchased with a remaining maturity of 60 days or less are valued at acquisition cost plus or minus any amortized discount or premium. Investments in mutual funds are valued at their stated net asset value. Other assets and securities for which no quotations are readily available are valued at fair value as determined in good faith by the Advisor in accordance with procedures approved by the Corporation’s Board of Directors. In accordance with such procedures, the Advisor may use broker quotes or, if the broker quotes are unavailable or deemed to be unreliable, fair value will be determined by a valuation committee of the Advisor. In determining fair value, the valuation committee takes into account all relevant factors and available information. Consequently, the price of the security used by the Fund to calculate its NAV may differ from quoted or published prices for the same security. Fair value pricing involves subjective judgments and there is no single standard for determining a security’s fair value. As a result, different mutual funds could reasonably arrive at a different fair value 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, given the volatility and periodic illiquidity experienced in current markets, the prices determined for any individual security on any given day may vary significantly from the amount that can be obtained in an actual sale of that security. |
In September 2006, the Financial Accounting Standards Board (FASB) issued SFAS 157, “Fair Value Measurements.” SFAS 157 defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and expands disclosure about fair value measurements. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. Management has determined that SFAS 157 had no material impact on the Fund’s financial statements. |
In March 2008, Statement of Financial Accounting Standards No. 161, “Disclosures about Derivative Instruments and Hedging Activities” (“SFAS 161”) was issued and is effective for fiscal years beginning after November 15, 2008. SFAS 161 is intended to improve financial reporting for derivative instruments by requiring enhanced disclosure that enables investors to understand how and why an entity uses derivatives, how derivatives are accounted for, and how derivative instruments affect an entity’s results of operations and financial position. SFAS 161 does not have any impact on the Fund’s financial statement disclosures because the Fund has not maintained any positions in derivative instruments or engaged in hedging activities. |
In preparing these financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through August 28, 2009, the date the financial statements were available to be issued. |
b) | Foreign Securities – Foreign securities are defined as securities issued by companies that are organized outside the United States. Investing in securities of foreign companies and foreign governments involves special risks and considerations not typically associated with investing in U.S. companies and the U.S. government. These risks include revaluation of currencies and future adverse political and economic developments. Moreover, securities of many |
Page 17
RiverFront Long-Term Growth Fund
Notes to the Financial Statements June 30, 2009 (Unaudited) |
2. | SIGNIFICANT ACCOUNTING POLICIES (cont.) |
foreign companies and foreign governments and their markets may be less liquid and their prices more volatile than those of securities of comparable U.S. companies and the U.S. government. Occasionally, events that affect those values and exchange rates may occur after the close of the exchange on which such securities are traded. If such events materially affect the value of a Fund’s securities, these securities may be valued at their fair value pursuant to procedures adopted by the Board of Directors. All the foreign securities owned by the Fund as of June 30, 2009 are traded on the New York Stock Exchange or NASDAQ. |
c) | Federal Income Taxes – The Fund intends to continue to qualify as a regulated investment company as provided in subchapter M of the Internal Revenue Code and to distribute substantially all of its taxable income to its shareholders in a manner which results in no tax cost to the Fund. Therefore, no federal income or excise tax provision is recorded. |
The Fund adopted Financial Accounting Standards Board (FASB) Interpretation No. 48 (FIN 48), “Accounting for Uncertainty in Income Taxes,” a clarification of FASB Statement No. 109, “Accounting for Income Taxes.” FIN 48 establishes financial reporting rules regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. Management has determined that FIN 48 has not resulted in any liability to the Fund. |
d) | Distributions to Shareholders – Dividends from net investment income, if any, are declared and paid annually. Distributions of net realized gains, if any, are declared and paid at least annually. |
e) | Allocation of Income and Expenses – The Fund is charged for those expenses directly attributable to it. Expenses directly attributable to a class of shares, such as Rule 12b-1 distribution fees, are charged to that class of shares. Income, expenses, and realized and unrealized gains and losses are allocated to the classes based on their respective net assets. Expenses that are not directly attributable to the Fund are allocated among the series of the Corporation in proportion to their assets. |
f) | Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
g) | Other – Investment and shareholder transactions are recorded on trade date. The Fund determines the gain or loss realized from investment transactions by comparing the original cost of the security lot sold with the net sales proceeds. Dividend income is recognized on the ex-dividend date and interest income is recognized on an accrual basis. Accounting principles generally accepted in the United States require that permanent financial reporting and tax differences be reclassified in the capital accounts. |
h) | Guarantees and Indemnifications – In the normal course of business, the Fund enters into contracts with service providers that contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown and this would involve future claims against the Fund that have not yet occurred. Based on experience, the Fund would expect the risk of loss to be remote. |
Page 18
RiverFront Long-Term Growth Fund
Notes to the Financial Statements June 30, 2009 (Unaudited) |
3. | CAPITAL SHARE TRANSACTIONS |
The following table summarizes the capital share transactions of the Fund for the six month period ended June 30, 2009 and for the period from October 28, 2008 (commencement of operations) through December 31, 2008:
Six Months Ended | Six Months Ended | ||||||||||||||||
June 30, 2009 | June 30, 2009 | ||||||||||||||||
Institutional Class Shares | Shares | Amount | Investor Class Shares | Shares | Amount | ||||||||||||
Shares sold | 722,259 | $ | 7,197,158 | Shares sold | 242,789 | $ | 2,591,545 | ||||||||||
Shares redeemed | (177,276 | ) | (1,633,254 | ) | Shares redeemed | (10,574 | ) | (103,941 | ) | ||||||||
Net increase | 544,983 | $ | 5,563,904 | Net increase | 232,215 | $ | 2,487,604 | ||||||||||
Shares Outstanding: | Shares Outstanding: | ||||||||||||||||
Beginning of period | 709,014 | Beginning of period | 40,622 | ||||||||||||||
End of period | 1,253,997 | End of period | 272,837 |
October 28, 2008(1) | October 28, 2008(1) | ||||||||||||||||
through | through | ||||||||||||||||
December 31, 2008 | December 31, 2008 | ||||||||||||||||
Institutional Class Shares | Shares | Amount | Investor Class Shares | Shares | Amount | ||||||||||||
Shares sold | 727,917 | $ | 7,567,640 | Shares sold | 40,368 | $ | 411,344 | ||||||||||
Shares issued to | Shares issued to | ||||||||||||||||
shareholders in | shareholders in | ||||||||||||||||
reinvestment of | reinvestment of | ||||||||||||||||
distributions | 5,326 | 54,064 | distributions | 254 | 2,578 | ||||||||||||
Shares redeemed | (24,229 | ) | (213,933 | ) | Shares redeemed | — | — | ||||||||||
Net increase | 709,014 | $ | 7,407,771 | Net increase | 40,622 | $ | 413,922 | ||||||||||
Shares Outstanding: | Shares Outstanding: | ||||||||||||||||
Beginning of period | — | Beginning of period | — | ||||||||||||||
End of period | 709,014 | End of period | 40,622 |
(1) | Commencement of operations. |
Page 19
RiverFront Long-Term Growth Fund
Notes to the Financial Statements June 30, 2009 (Unaudited) |
4. | INVESTMENT TRANSACTIONS AND INCOME TAX INFORMATION |
During the six months ended June 30, 2009, the Fund’s purchases and sales of investment securities (excluding short-term investments) were $11,383,924 and $3,360,990, respectively.
At December 31, 2008, the Fund’s accumulated earnings/losses on a tax basis were as follows:
RiverFront | ||||
Long-Term | ||||
Growth Fund | ||||
Cost of Investments | $ | 7,847,116 | ||
Gross unrealized appreciation | $ | 291,488 | ||
Gross unrealized depreciation | (169,719 | ) | ||
Net unrealized appreciation | $ | 121,769 | ||
Undistributed ordinary income | $ | 2,683 | ||
Undistributed long-term capital gain | — | |||
Total distributable earnings | $ | 2,683 | ||
Other accumulated losses | $ | (81,440 | ) | |
Total accumulated earnings | $ | 43,012 |
Undistributed income or net realized gains for financial statement purposes may differ from amounts recognized for federal income tax purposes due to differences in the recognition and characterization of income, expense and capital gain items.
Under the current tax law, capital losses realized after October 31 may be deferred and treated as occurring on the first day of the following fiscal year. For the period October 28, 2008 through December 31, 2008, the Fund elected to defer capital losses occurring between November 1, 2008 and December 31, 2008 in the amount of $81,440.
At December 31, 2008, the Fund had no accumulated net realized capital loss carryovers. To the extent the Fund realizes future net capital gains, taxable distributions to shareholders will be offset by any unused capital loss carryovers.
During the six months ended June 30, 2009, the Fund did not distribute ordinary income dividends and net realized capital gains. During the period October 28, 2008 through December 31, 2008, the Fund paid ordinary income dividends of $62,375. The Fund did not distribute net realized capital gains.
5. | INVESTMENT ADVISORY AND OTHER AGREEMENTS |
The Fund has entered into an Investment Advisory Agreement with Baird for the provision of investment advisory services. Pursuant to the Investment Advisory Agreement, the Advisor is entitled to receive a fee, calculated daily and payable monthly, at the annual rate of 0.65% for the Fund as applied to the Fund’s average daily net assets. Certain officers of the
Page 20
RiverFront Long-Term Growth Fund
Notes to the Financial Statements June 30, 2009 (Unaudited) |
5. | INVESTMENT ADVISORY AND OTHER AGREEMENTS (cont.) |
Advisor are also officers of the Fund. The Fund has also entered into a Sub-Advisory Agreement with Baird and RiverFront under which RiverFront in its capacity as investment sub-advisor is responsible for the management of the Fund’s assets subject to the Advisor’s oversight. Pursuant to the Sub-Advisory Agreement, the Advisor (not the Fund) is responsible for paying RiverFront a sub-advisory fee at an annual rate of 0.45% of the Fund’s average daily net assets.
For the period from October 28, 2008 through December 31, 2008 (commencement of operations), and years ending 2009, 2010 and 2011, the Advisor has contractually agreed to waive its investment advisory fee and/or reimburse the Fund’s operating expenses (exclusive of brokerage commissions, taxes, and extraordinary expenses, but including the fees and expenses incurred by the Fund in connection with its investments in ETFs and other investment companies) to the extent necessary to ensure that the Fund’s annual operating expenses do not exceed 0.90% of the average daily net assets of the Fund’s Institutional Class Shares and 1.15% of the average daily net assets of the Fund’s Investor Class Shares.
To the extent that the Advisor reimburses or absorbs fees and expenses, it may seek payment of such amounts for three years after the year in which expenses were reimbursed or absorbed. The Fund will make no such payment, however, if its total annual operating expenses exceed the expense limits in effect at the time the expenses were reimbursed or at the time these payments are proposed.
Period Ended | ||
October 28, 2008 | ||
Six Months Ended | through | |
June 30, 2009 | December 31, 2008 | |
Reimbursed/Absorbed Expenses Subject to Recovery By Advisor Until: | 2012 | 2011 |
RiverFront Long-Term Growth Fund | $48,459 | $35,032 |
U.S. Bancorp Fund Services, LLC serves as transfer agent, administrator, and accounting services agent for the Fund. U.S. Bank, N.A. serves as custodian for the Fund.
Robert W. Baird & Co. Incorporated (the “Distributor”) is the sole distributor of the Fund pursuant to a distribution agreement.
No commissions were earned by the Distributor for services rendered as a registered broker-dealer in securities transactions for the Fund for the six months ended June 30, 2009.
6. | LINE OF CREDIT |
The Corporation maintains an uncommitted, senior secured line of credit (“LOC”) with U.S. Bank, N.A. (the “Bank”) to provide the Fund a temporary liquidity source to meet unanticipated redemptions. Under the terms of the LOC, borrowings for the Fund are limited to one-third of the total assets (including the amount borrowed), or as otherwise indicated within the Fund’s agreement with the Bank. The Bank charges interest at the Bank’s Prime Rate less 1%. For the six months ended June 30, 2009 the Fund did not borrow from the LOC.
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RiverFront Long-Term Growth Fund
Notes to the Financial Statements June 30, 2009 (Unaudited) |
7. | DISTRIBUTION AND SHAREHOLDER SERVICE PLAN |
The Fund has adopted a distribution and shareholder service plan (the “Plan”) pursuant to Rule 12b-1 under the 1940 Act. The Plan allows the Fund to compensate the Distributor for the cost incurred in distributing the Fund’s Investor Class Shares, including amounts paid to brokers or dealers, at an annual rate not to exceed 0.25% of the average daily net assets of the Fund’s Investor Class Shares. The Fund incurred $1,356 in fees pursuant to the Plan during the six months ended June 30, 2009.
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Additional Information
Proxy Voting
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling toll free, 1-866-44BAIRD, or by accessing the Fund’s website at www.bairdfunds.com; and by accessing the SEC’s website at www.sec.gov.
The Fund’s proxy voting record for the most recent 12-month period ended June 30 will be available in August 2009 without charge, upon request, by calling toll free, 1-866-44BAIRD, or by accessing the Fund’s website at www.bairdfunds.com; and by accessing the SEC’s website at www.sec.gov.
Portfolio Holdings Disclosure
The Fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Forms N-Q are available on the SEC website at www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-732-0330. The Fund’s Forms N-Q may also be obtained by calling toll-free 1-866-44BAIRD.
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Baird Funds, Inc.
RiverFront Long-Term Growth Fund
c/o U.S. Bancorp Fund Services, LLC
P.O. Box 701
Milwaukee, WI 53201-0701
1-866-44BAIRD
Board of Directors
G. Frederick Kasten, Jr. (Chairman)
John W. Feldt
Frederick P. Stratton, Jr.
Cory L. Nettles
Marlyn J. Spear
Investment Advisor and Distributor
Robert W. Baird & Co. Incorporated
777 East Wisconsin Avenue
Milwaukee, WI 53202
Sub-Advisor
RiverFront Investment Group, LLC
9011 Arboretum Parkway
Suite 110
Richmond, VA 23236
Administrator and Transfer Agent
U.S. Bancorp Fund Services, LLC
P.O. Box 701
615 East Michigan Street
Milwaukee, WI 53202
Custodian
U.S. Bank, N.A.
1555 N. RiverCenter Drive, Suite 302
Milwaukee, WI 53212
Legal Counsel
Godfrey & Kahn, S.C.
780 North Water Street
Milwaukee, WI 53202
Independent Registered Public Accounting Firm
Grant Thornton LLP
175 West Jackson Boulevard, 13th Floor
Chicago, IL 60604
Item 2. Code of Ethics.
Not applicable - only required for annual reports on Form N-CSR.
Item 3. Audit Committee Financial Expert.
Not applicable - only required for annual reports on Form N-CSR.
Item 4. Principal Accountant Fees and Services.
Not applicable - only required for annual reports on Form N-CSR.
Item 5. Audit Committee of Listed Registrants.
Not applicable to registrants who are not listed issuers (as defined in Rule 10A-3 under the Securities Exchange Act of 1934).
Item 6. Schedule of Investments.
The Schedules of Investments are included as part of the semi-annual reports to shareholders filed under Item 1 of this Form N-CSR.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable because the Registrant is not a closed-end management investment company.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable because the Registrant is not a closed-end management investment company.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable because the Registrant is not a closed-end management investment company.
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s board of directors.
Item 11. Controls and Procedures.
(a) | The Registrant’s management, with the participation of its principal executive and principal financial officers, has evaluated the effectiveness of the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”)), as of a date within 90 days prior to the filing date of this Form N-CSR. Based on such evaluation, the Registrant's principal executive and principal financial officers have concluded that the design and operation of the Registrant's disclosure controls and procedures are effective in providing reasonable assurance that the information required to be disclosed on Form N-CSR is recorded, processed, summarized and reported within the applicable time periods. |
(b) | There were no changes in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting. |
Item 12. Exhibits.
(a) | (1) Any code of ethics or amendment thereto, that is subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy Item 2 requirements through filing an exhibit. Not Applicable. |
(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith.
(3) Any written solicitation to purchase securities under Rule 23c-1 under the Act sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. Not applicable because the Registrant is not a closed-end management investment company.
(b) | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Furnished herewith. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
BAIRD FUNDS, INC.
By: /s/ Mary Ellen Stanek
Mary Ellen Stanek, President
Date: September 8, 2009
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: /s/Mary Ellen Stanek
Mary Ellen Stanek, President
Date: September 8, 2009
By: /s/Leonard M. Rush
Leonard M. Rush, Treasurer
Date: September 8, 2009