In the initial quarter of the year, equity markets experienced an upward trend, fueled by decreasing interest rates and a resurgence in economic activities and corporate fundamentals. However, the macro-economic landscape shifted significantly as March commenced. The situation was exacerbated by geopolitical events, including military actions, which introduced a period of heightened uncertainty.

During this volatile period, the Baird Small/Mid Cap Growth strategy recorded a net decrease of 4.8% after fees. This performance lagged behind its main benchmark, the Russell 2500 Growth Index, which saw a comparatively smaller decline of 3.5%. While the technology and industrial sectors demonstrated resilience and contributed positively to the portfolio's relative performance, the consumer discretionary and healthcare sectors, especially in March, faced challenges that weighed down overall returns. The technology sector, in particular, was a notable strong point, with its holdings falling by only 5% against the benchmark's steeper 14% drop.

Looking ahead, the strategy remains diversified, focusing on differentiated small and mid-cap growth companies. This approach aims to capitalize on market volatility and maintain attractive risk-reward characteristics. Despite ongoing concerns about inflation, interest rate uncertainties, and geopolitical tensions, the portfolio is positioned to seek out opportunities for long-term growth and stability in a dynamic investment environment.