Introduction
During the December 31, 2024 quarter, the GW Investment Institute (GWII) concluded the Fall 2024 semester with two stock pitch days, where 32 students presented buy/sell ideas, resulting in 11 accepted pitches for investment. Students in the Applied Financial Securities Analysis class visited BlackRock’s DC office and hosted six guest speakers, including GW’s President Granberg. GWII held its Second Annual GW Ramsey Scholars Investment Summit, welcoming 16 scholars from the inaugural and recent cohorts. The McGill International Portfolio Challenge team reached the semi-finals, with one student earning the Best Speaker award at the conference. Professor Rodney Lake completed Season 1 of “Market News with Rodney Lake,” covering 25 industry topics. He co-hosted a discussion on Financial Futures: What the Upcoming Election Means for Markets & Taxation with Peter Boockvar in New York City. GWSB senior Tristan Smith, who just graduated in December 2024 and is an incoming M&A Analyst, writes this quarter’s market commentary.
Market Commentary
The fourth quarter of 2024 capped off a strong year for equity markets, with the S&P 500 gaining +2.4% for the quarter and +25.0% for the year. Federal Reserve actions and the presidential election on November 5th shaped market sentiment. Before the election, markets were relatively flat due to electoral uncertainty. Following the Republican sweep, markets rallied on the “Trump 2.0 Trade” phenomenon, with investors expressing optimism for Republicans’ seemingly pro-business regulation and tax policies. Citing ‘increased but still low’ unemployment and lowered inflation, the Fed also cut the federal fund’s target rate range by 25 basis points (bps) to 4.50-4.75% in November, further fueling investor optimism. However, December brought a market correction, as the Fed cut rates another 25 bps to 4.25-4.50% but reduced their 2025 rate-cutting projections from four cuts to two.
Investor concerns also grew about rising treasury yields and risks mainly tied to President Trump’s proposed tariffs.
Notable outperforming sectors included Consumer Discretionary (+14.1%), Communication Services (+8.6%), and Financials (+6.7%) – primarily driven by rotation to cyclicals under the “Trump 2.0 Trade.” Notable underperforming sectors included Materials (-12.8%), Health Care (-10.7%), and Real Estate (-8.8%) – primarily driven by sector-specific Trump policy risks and rising treasury yields.
GWII Student Investment Funds outperformed the benchmark by 10.7% for the year. For the quarter, the GW SIFs outperformed the benchmark by 1.5%.
We invite you to review the full report below: