Introduction
During the quarter that ended on December 31, 2023, the GW Investment Institute (GWII) hosted an alumni reception in NYC, took a group of students to Sands Capital and Cushman and Wakefield, and held three Stock Pitch Days as well as awarded the first three Charles Schwab Foundation Awards to three students with the best pitches for a total of $1,250. The following commentary was written by Yaseen Shah, a GWSB senior graduating in 2024 with a major in Finance. Yaseen will be an Investment Banking Analyst at Clearsight Advisors after graduation.
Market Commentary
Prepared by Yaseen Shah, GW ’24
2023 concluded with a strong rally in the equity markets – the S&P 500 Index jumped (11.70%) in the fourth quarter and grew (26.30%) for the year. The main driver behind this quarter’s growth was the market’s anticipation of interest rate cuts by the Federal Reserve in the coming year. Given inflation easing closer to 2.00% (3.10%) and low unemployment (3.70%), the Fed has maintained a federal funds target rate of 5.25% and 5.50%.
All sectors, with the exception of Energy, ended 2023’s final quarter in the green. Real Estate (18.83%) was the top-performing sector in the quarter as optimism brews for a 2024 comeback for residential and commercial real estate. Technology (17.71%) also performed exceptionally, with the Magnificent Seven (AAPL, AMZN, GOOG, META, MSFT, NVDA, TSLA) and large-cap tech names advancing in the AI space. Other notable sectors that grew were Consumer Discretionary (11.33%), Consumer Staples (5.47%), Financials (14.03%), Health Care (6.41%), Industrials (13.05%), Materials (9.68%), Utilities (8.56%), and Communication Services (11.04%); Energy (-6.35%) was the only sector in the red as oil prices declined below $80 per barrel amid geopolitical tensions.
For the fourth quarter of 2023, GWII’s Student Investment Funds underperformed the benchmark by 40 basis points at (11.30%) vs. (11.70%) for the S&P 500 Index. However, individually for the quarter, the GW Ramsey Fund (11.80%) and the GW Real Estate Fund (16.30%) surpassed the S&P 500’s growth. For the calendar year of 2023, GWII’s portfolios outperformed the benchmark (31.10%) vs. (26.30%) for the S&P 500 Index.
We invite you to review the full report below: