Introduction
During the quarter ending September 30, 2025, the GW Investment Institute (GWII) welcomed 39 students across its two finance courses. GWII celebrated several milestones, including sending a team to the Cornell Women in Investing Conference, where the team secured the Presentation Winner award. GWII also published its annual report and launched season three of Market News with Rodney Lake. In addition, GWII co-hosted the Summer in the City networking event in New York City and participated in the GW Alumni at the Rockies event. This quarter’s market commentary is written by Kaitlyn Johnson, a GW School of Business senior majoring in Finance and International Business. Following graduation, Kaitlyn will join RBC as an investment banking analyst in NYC.
Market Commentary
The third quarter of 2025 marked a strong period for global equity markets, with the S&P 500 advancing +8.1% and extending year-to-date gains to +14.8%. Investor sentiment improved as inflation cooled and the Federal Reserve delivered its first rate cut of the year, lowering the federal funds rate by 25 basis points amid signs of a softening labor market and moderate wage growth. Although jobless claims edged higher at the start of the quarter, they remained low by historical standards. As measured by the MSCI, emerging markets delivered double-digit returns year to date at 28.0%, supported by a weaker dollar and US-China trade talk progress towards the latter half of the quarter. Growth stocks outpaced value stocks in large-cap markets, although small-cap stocks outperformed large-cap stocks this quarter.
The Technology sector outperformed both the broader market and most defensive sectors. As of 9/30/205, the “Magnificent 7” mega-cap tech stocks hold an approximately combined 33% weighting in the S&P 500 Index and account for approximately 50% of the year-to-date gains, supported by accelerating investment in artificial intelligence and cloud infrastructure.
Ten of the eleven underlying sectors in the S&P 500 increased returns this past quarter, with Consumer Staples the only sector to lag behind, down 3.1%. Fueled by strong corporate earnings this quarter, notable outperforming sectors include Technology +14.5 %, Communication Services +13.4 %, and Financials +2.7 %.
GWII Student Investment Funds have returned 16.1% year to date, outperforming the S&P Index by 130bps. For the quarter, GW SIFs outperformed the benchmark by 90bps.
We invite you to review the full report below: