Introduction
During the quarter that ended on September 30, 2023, the GW Investment Institute (GWII) began the 2023 fall semester, sent a student team to compete in Cornell’s Women in Investing Conference in Boston, and held the inaugural Ramsey Scholars Investment Summit. The following commentary was written by William Ahrens, a GWSB undergraduate student graduating in 2025 with a double major in Accountancy and Finance.
Market Commentary
Prepared by Will Ahrens, GW ’24
During the quarter, markets remained dynamic in response to the Federal Reserve’s evolving macroeconomic policy and heightened geopolitical tensions. On the domestic front, a high inflationary environment compounded with a strong labor market has influenced investor expectations of the Federal Reserve’s potential interest rate increases, with Federal Reserve officials signaling a single hike remains. While the outlook for future rate changes remains uncertain, the federal funds rate remains steady within a target range of 5.25% – 5.50%.
Notable performances were observed in the Energy (11.33%) and Communication Services (2.84%) sectors. Upstream and supermajor companies played a central role in the standout performance of the Energy sector throughout the period. However, other
sector equity returns remain depressed, facing a continued inflationary and uncertain environment returning: Utilities (-10.10%), Real Estate (-9.65%), Information Technology (-5.84%), Materials (-5.25%), Healthcare (-3.06%), and Financial Services (-1.60%). The Consumer Staples (-6.61%) and Consumer Discretionary (-5.00%) sectors remained negative throughout the quarter as companies and investors evaluated the impact of glucagon-like peptide 1 (GLP-1) drugs on consumer habits, spending, and consumption.
Overall for the quarter, the GWII’s Student Investment Funds, in the aggregate, underperformed the benchmark with a return of -4.6% vs. -3.3% for the S&P 500 while outperforming the benchmark year over year at 24.5% vs. 21.6% for the S&P 500.
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