Author: GW Investment Institute

Full Report: GWII Quarterly Report June 2022

Market commentary

Financial markets sharply declined as investors grappled with surging inflation, the actions of the U.S. Federal Reserve (the Fed), and a global economic slowdown throughout the quarter ended June 30, 2022. Inflation spiked to a staggering 9.1% year-over-year reading in June, the highest in over 40 years. Ongoing conflict in Ukraine, which has upended global
commodity markets and supply chains, contributed to the heightened food and gas prices. To combat inflation, the Fed raised interest rates 75 basis points in June, the largest hike since 1994. Equity markets responded poorly to the state of developments, and firmly entered into bear territory. While all sectors in the S&P 500 lost value, the declines were most significant in consumer discretionary, communication services, and information technology, and least pronounced in the energy, utilities, and consumer staples sectors.

For the quarter ended June 30, 2022 the GW Investment Institute Student Investment Funds in aggregate underperformed the benchmark with a return of -18.0% vs. -16.1% for the S&P 500, while slightly outperforming the benchmark in the calendar year-to-date -19.9% vs. -20.0% for the S&P 500. The long-term aggregate fund performance is a testament to the enduring diligence and commitment of our students, faculty, and alumni.

Samir Iqbal, Portfolio analyst, GW Phillips Student Investment Fund

Mr. Ramsey is the chair of the Governing Board for the George Washington University Investment Institute and the chairman emeritus of the GW’s Board of Trustees. In his commencement speech to GWSB class of 2022 graduates he advises them to:

1. Be bold and have big audacious goals. 

2. Don’t run from failure. Learn from it and never give up. 

3. Find mentors.

Watch the full video at GWSB YouTube channel:

Full Report: GWII Quarterly Report March 2022

Market commentary

The first quarter of 2022 saw financial markets plagued by volatility, caused first by the fast-spreading Omicron variant of the COVID-19 virus, and then by Russia’s unprovoked invasion of Ukraine. Throughout the quarter, the anticipation and implementation of interest rate hikes – as well as continued record-high inflation readings – did not help to ease the pain. The VIX, an index that measures volatility in financial markets, reached its highest level this quarter since January 2021. The Dow Jones Industrial Average recorded its largest-ever daily point gain in late February, after falling 4.5% during one week in January.

The S&P 500 Index was largely kept afloat by the Energy sector, which returned 33.5% during the quarter. Technology companies were hit hard during the quarter, with Meta Platforms (formerly Facebook), a GW Phillips Student Fund holding, falling over 25% in one day this February.

For the GW Investment Institute Student Investment Funds (GWII SIFs), returns during the first quarter were -4.0%, outperforming the S&P 500 Index, which returned -4.6%. The success of the GWII SIFs is a direct result of the continued hard work of students, faculty, staff, and alumni. 

Andrew Salm, Portfolio analyst, GW Phillips Student Investment Fund

The GW Quant Student Investment Fund is the newest fund of the GW Investment Institute (GWII) launched in December of 2021.

The finance industry has experienced large changes due to technological innovations, for example the increase in quantitative strategies. This course provides an overview of some common quant investing strategies and focuses on data-driven models, which is different from the fundamental analysis and subjective assessments which are the focus of the other GWII student funds. Students learn how to analyze time-series data and work in groups to find and analyze real data and build and test a predictive model. 

Below is a short summary of the 8 final projects for the GW Quant Student Investment Fund for Spring 2022. 

Foggy Fund: Used a three-factor model and tracked its momentum via an RSI indicator to understand which areas of the tech sector are performing best and tailor an investment strategy accordingly. 

Quant Queens: Investigated the perceived information advantage of members of Congress to see if using their stock trades and other criteria about the members could outperform the market. 

Steeling Alpha: Developed a model to predict the price of American steel producing companies. 

Dividend Factor Model: Developed a multi-factor model to see whether dividend-paying stocks could outperform with lower volatility. 

Quantify the Fundamental Elements: Used an F-score model for the company fundamentals and then selected companies with highest momentum

Quant Squad Capital: Investigated event-driven trading for sports betting companies around big sporting events. 

Axe Capital: Focused on momentum trading and developed a model based on exponential moving averages.

The E Screen: Interested in whether environmental performance (operationalized as a company’s reduction in greenhouse gas emissions) helped predict stock price. 

Given that the teams only had one semester to learn about quant investing and develop models they all had recommendations for future research, such as: including other variables, examining other time frames, gaining a better understanding of entry and exit points or position sizing, and examining the effect of more frequent trading.

Thanks to all the students for their hard work during the semester. 

Rodney Lake

Full Report: GWII Quarterly Report December 2021

Market commentary

Fourth quarter of 2021 recorded strong performance, closing the year with many indexes hitting all-time highs, despite widespread political and economic uncertainties combined with the emergence of a new variant of COVID-19, Omicron. In November, for the first time ever, the Dow Jones Industrial Average (DJIA) crossed 36,000 points. The DJIA still finished the year near an all-time high as concerns surrounding the Federal Reserve response to decades-high inflation metrics plus renewed fears of pandemic-related shutdowns mounted.

For the GW Investment Institute Student Investment Funds (GWII SIFs), returns were strong at 8.6% vs. 10.7% for the S&P 500 Index during the quarter. For the year, the GWII SIFs trailed the S&P 500 Index, returning 21.1% vs. 28.7%. After the first full calendar year of the pandemic, GWII SIFs continue to demonstrate strong performance and resilience, despite economic and political uncertainties impacting the broader market. The success of the GWII SIFs is a direct result of the continued hard work, dedication, and involvement of our students, faculty, staff, and alumni.

Ethan Baron, Teaching Assistant, GW Quant Student Investment Fund

It is my pleasure to share with you this guest blog post from Lexington Zografakis, a senior at George Washington University working towards her Bachelor’s in Business Administration with a concentration in Finance and a minor in Economics. She took the GW Investment Institute Venture Capital class and we are fortunate to have her as the teaching assistant for that class for two semesters. We were also pleased to nominate and support Lexington as she piloted a program for our venture capital students to intern with a start-up and learn more about the business. 

Rodney E. Lake

Director, GW Investment Institute 

Guest blog post by Lexington Zografakis

Last Spring, Vice Dean Lake asked me if I would like to pilot a fellowship program in affiliation with the GW Investment Institute and one of the portfolio companies for the Asper Group. Without hesitation, I said “yes.” At that time, however, I did not know that saying “yes” would transform into one of the most impactful and rewarding experiences I’ve had as a student at GW. 

As part of the fellowship, I interned with Obsess, a New York-based start-up that is reinventing the e-commerce interface to be more experiential and engaging through the development of 3D virtual stores for fashion and retail brands across the globe. Throughout the semester, I worked on various assignments, from creating a robust database of their virtual stores to researching different gaming platforms and their current applications in fashion and retail. I also attended meetings with the entire team each week, where I learned more about their strategic mission and emerging topics, like NFTs and the metaverse. Albeit over Zoom, I appreciated the glimpse I was able to get into life at a start-up: the excitement, challenge, and what I consider the most important, the fervent passion and support in both the highs and the lows. 

One of the most impactful parts of the experience, however, was the support and mentorship I received from Ms. Neha Singh, the founder and CEO of Obsess. Despite having a full schedule with back-to-back meetings and the various other responsibilities of being a founder, Ms. Singh met with me each week to respond to questions I had, discuss the deliverables I submitted, and provide feedback on them. In previous internships, I often struggled to understand the “why” behind the work I was doing, but the experience I had at Obsess was quite the opposite. Ms. Singh listened to me with intent, asked questions about the research I did, and ensured that I knew the value in the work I was doing. 

These past three months have been some of the most rewarding, leading to immeasurable growth as a student, professional, and person. While I gleaned invaluable insight into the life of a founder and the dynamic of working at a start-up, I was also immersed in an environment that challenged and inspired me to be more creative and inquisitive and to have far more confidence in the value I bring to spaces. And for one of the first times, I began envisioning myself as a founder where I too was capable of building a business from a place of passion and conviction. 

After having such a wonderful experience, I will be continuing working with Obsess this semester. Thank you to both the GW Investment Institute and Mr. David Asper for allowing me to be a part of this incredible experience and for providing students at GW with opportunities like this, and thank you to Ms. Singh and the rest of the team at Obsess for allowing me to be a part of the magic!