When discussing fixed income investments, many people focus on hitting home runs and going for the big wins. However, according to Mary Ellen Stanek, co-chief investment officer at Baird Advisors, success in this asset class is more about consistency and maintaining a high batting average. Stanek emphasizes the importance of avoiding high strikeout percentages by focusing on areas with a higher probability of adding value. This includes looking at yield curve positioning, sector allocation, and individual security selection as key factors in achieving competitive track records.
With over 45 years of experience in the industry, Stanek’s approach to fixed income investments has been honed over time. Starting her career in 1979 at First Wisconsin Trust during a period of sharply rising interest rates, Stanek quickly learned the importance of understanding risk and seizing opportunities in volatile market conditions. Her duration-neutral strategy, launched in 1985, has been the cornerstone of her success ever since. In 2000, she co-founded Baird Advisors, where she oversees $136.5 billion in fixed income assets, including the highly-rated Baird Aggregate Bond Fund.
Over the years, Stanek has garnered accolades for her outstanding performance in the industry. From being named to Pensions & Investments’ Influential Women in Institutional Investing to being recognized as an outstanding portfolio manager by Morningstar, Stanek’s track record speaks for itself. Her commitment to delivering competitive products with transparent risk profiles has earned her the trust and confidence of investors seeking attractive returns with peace of mind.
As credit spreads tighten and market conditions shift, Stanek and her team at Baird Advisors remain selective in their investments. With a focus on Treasury bonds and a cautious approach to credit exposure, they seek to capitalize on new opportunities while keeping dry powder for better prospects. Stanek advises investors to review their portfolios regularly and consider moving out the yield curve for longer-term gains, especially with the current yield curve inversion presenting opportunities for higher short-term yields.
While Stanek sees potential in securitized products and AAA-rated non-agency MBS assets, she stresses the importance of bottom-up research and selective diversification. By carefully managing risk and maintaining a balanced approach to investments, investors can mitigate potential challenges and seize opportunities in a rapidly evolving market. Stanek’s advice to investors is clear: stay vigilant, review your portfolio regularly, and approach diversification methodically to achieve long-term success in fixed income investments.