GW INVESTMENT INSTITUTE INSIGHTS

The GW Investment Institute (GWII) teaches students at the George Washington University how to invest and how to think about investing. Our students serve as analysts and portfolio managers, managing over $7.7 million (as of 12/13/2023) in university endowment funds across four student investment funds covering: equities, real estate, and quantitative investing. The institute also offers a class on venture capital. In the GW School of Business finance classes taught by the GWII, students:

The GWII has over 1,400 alumni worldwide. Our alumni make contributions by providing guest lectures, mentoring, advising, connections, and donations. 

Your financial support for the GW Investment Institute enables real-world learning and networking opportunities for our students. It improves a student’s experience at GW and contributes to better industry placement.

Support Student Experience

• $2,500 – Part-time Student Intern for one semester.
• $5,000 – One GW team at the Cornell’s Women in Investing Conference.
• $10,000 – One GW team at the McGill’s buy side competition in Canada.
• $10,000 – Alumni reception in New York City or Washington, D.C.
• $20,000 – Finance Career Trek NYC for 10 students from our classes.
• $30,000 – Student Teaching Assistants helping with our classes.
• $30,000 – FactSet annual subscription. 

Serve

• $50,000 – Advisory Board membership. Learn more.
• $1,000 – GWII Alumni Advisor and Luther Rice Society membership.

Build Legacy

• $25,000 – Lead GWII Conference sponsor.
• $100,000 – Name endowed scholarship.
• $1 million – Name fund and serve on the GWII Governing Board.
• $5 million – Endow the Institute Director position.
• $21 million – Name the Institute.

Your support is much appreciated and every dollar donated to the Institute will go toward providing more opportunities for our students. 

***Donations to the George Washington University are tax deductible.***
Questions? Please reach out to Bojana Jankovic, bjankovic@gwu.edu. 

Dear Friends and Supporters of the GW Investment Institute,

I am delighted to present the GW Investment Institute’s fiscal year 2023 annual report, celebrating a remarkable academic year. Along with esteemed Professors Matt Miller, Christine Song, and Bill Collier, we taught nine finance classes as part of the GW Investment Institute (GWII). We hosted 57 industry professionals, both in-person and virtually.

I am proud to share that we awarded $50,000 in financial accolades to our top 10 performing students, acknowledging their exceptional dedication in our classes. Furthermore, we coordinated the allocation of the first endowed scholarship to support women in finance.

Additionally, we expanded access to new tools for financial research. Namely, we integrated FactSet into our class curriculum and worked closely with BlackRock to introduce our students to their Aladdin technology.

Last fall, we hosted an alumni reception in New York City and enjoyed connecting with former students. Further, our Annual Conference on Quant Investing brought together more than 60 students, faculty, and alumni, fostering insightful discussions on the latest advancements in quantitative investing.

Regarding student competitions, for the fifth year, our students showcased their exceptional talent at the McGill International Portfolio Challenge, reaching the semifinals. Further, we sent one of our students to Cornell’s Women in Investing Conference for the first time.

Even though our primary goal is to teach students how to invest and preserve endowment capital, our Student Investment Funds continued outperforming the S&P 500 Index.

I extend my heartfelt gratitude to our dedicated students, professors, staff, teaching assistants, advisory and governing board members, portfolio advisors, and guest speakers who consistently go above and beyond to advance our mission of excellence in experiential investment education. It is through your collective efforts that we have achieved such remarkable success.

Our accomplishments and the exceptional performance of GWII’s Student Investment Funds reflect the hard work and dedication of 1,400+ alumni, faculty, and staff. On behalf of the GWII, thank you for your continuous support and unwavering engagement. With great enthusiasm, I eagerly anticipate the future of GWII and our continued growth, further shaping the landscape of investment education.

Sincerely, 

Rodney E. Lake
Director, GW Investment Institute

We invite you to review the full report below:

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.

We invite you to review the full report below:

The GW Investment Institute (GWII) recently hosted an Alumni Reception in New York City. Held at the elegant venue, The Skylark, located on the 30th floor at 200 W 39th Street, the event was marked by reconnection and insightful discussions.

One of the key elements that contributed to the success of the event was the enthusiastic participation of our alumni community, with over 25 GWII alumni in attendance.

The GWII team extends its gratitude to all the attendees for making this gathering so memorable. Your presence and active participation made the event a resounding success. We are appreciative of your continued support of GWII.

The event also marked a celebration of our alumni’s success. We are incredibly proud of our alumni and their accomplishments in finance. The event was a testament to the strength of our network and the impact our alumni are making in their respective workplaces.

We look forward to the next opportunity to bring together our alumni for another evening of connection. Stay tuned for future events and updates as we continue to foster connections and knowledge-sharing within our community.

Thank you also to GWSB Development and Alumni Relations who supported this event.

Nicolle Ugarte, a senior at the GW School of Business (GWSB) and the Columbian College of Arts & Sciences (CCAS), double majoring in Finance and Political Science, writes this guest blog post. Thank you to the Strategic Investment Group for sponsoring our WIN Conference participation again this year. 

Established in 2016, Cornell’s Undergraduate Women in Investing (WIN) Conference is designed to educate undergraduate students about the rewarding career opportunities available in investment management, where women are vastly underrepresented. Welcoming students from top universities and professionals from sponsoring firms, the WIN Conference provides a unique space for networking, gaining insights from industry experts, and refining stock-picking skills through pitches to investing firm judges.

Rhys Chambers, Elizabeth Ellis, Sandy Isabel Huang Yin, and I represented GW this year at the WIN Conference in Boston. Reflecting on this experience, it has been one of my best experiences at GW; not only did I learn more about the financial industry and the stock market, but I was also able to meet other outstanding women working in the financial sector. 

On the first day of the conference, we started with a networking session, where we met the other participating teams. This was a great experience as we met women from other universities interested in pursuing a career in finance and business. We also discussed the different sectors and stocks we selected for our pitches. After the session, we headed to dinner, where we listened to two panelists who provided insightful views on the current role of Environmental, Social, and Governance (ESG) in the investment business. They also shared about the structure and design of the conference. After a great dinner, we went to our rooms and practiced our stock pitch.

On the second day, we woke up early, headed to the main room for breakfast, and rehearsed our stock pitch with our advisor. After going through our pitch multiple times, we were confident and ready to pitch our stock to the judges. We went to the pitch room and took notes from the other presentations. Soon, it was our turn to pitch. We pitched our stock buy recommendation to the judges, delivering our best pitch yet. We communicated our main arguments and confidently answered the judges’ questions.

After our presentation, we received the judges’ feedback. It was a great experience as we got hands-on experience pitching stocks and analyzing a new sector, which in our case was consumer discretionary, focusing on shoes and sportswear apparel. Although we didn’t win, we did a great job pitching Deckers Outdoor Corp (DECK) and learned quite a bit from the judge’s feedback.

After the stock pitch, we joined the networking session with investment funds and other financial institutions. This session was incredible as we were invited to network with representatives of more than twelve financial companies in the U.S., including Fidelity, T. Rowe Price, Dodge & Cox, and others. During this session, we also got to ask questions regarding job applications, the transition from college to corporate life, and tips for incoming interns. After the network event, we had dinner while listening to the final keynote speaker and the closing remarks of Lakshmi Bhojraj, the Cornell Parker Center Executive Director.

After the event, we checked out from our hotel and squeezed our exploration of Boston into 1.5 hours! Overall, Cornell’s WIN Conference was an outstanding experience as we learned more about the investment industry and networked with remarkable women working in finance. It was also an excellent opportunity for us to represent GW and the GW Investment Institute (GWII)!

Thank you to our mentor, Professor Song, our advisor Kathleen Hinman, and the whole GWII team, Professor Lake and Bojana Jankovic!

Nicolle Ugarte

Focusing solely on financial metrics and valuation models can be alluring when evaluating potential investments. However, assessing the management team is crucial. 

Understanding the Business when Evaluating Management

To provide some fundamental context, investors should work to understand the company’s underlying business model and competitive environment using the Business aspect of the BMPB framework. For example, what product or service does the firm provide, i.e., how do they generate revenue? Who are the major competitors? How large is the total addressable market? 

This grounding in the fundamentals of the business is a critical context for evaluating the aptitude of management.

Evaluating the Management Team

With a basic understanding of the business, the Management element focuses on the human capital leading the company. Some essential questions to answer:

• What is the capital allocation track record of the executive team? Have they demonstrated prior success at this company or in this industry concerning the company’s growth, from either organic growth or mergers and acquisitions? What’s the company’s dividend policy, share buyback program, and debt management on the balance sheet, and do these activities align with shareholders? 
• Are management incentives adequately aligned with shareholders? Or does executive compensation appear skewed too heavily toward the short term?
• Does the management team exhibit integrity, transparency, and accountability with shareholders? Or do they seem only to pay lip service to investors?
• Is there high turnover or departures of critical executives that raise a red flag? Does talent thrive and stick around at the company?
• Does the board include respected leaders who can advise and challenge management as needed?

Why Management Matters

Investors who overlook management diligence and focus narrowly on short-term financials or valuation multiples often regret that decision later. Some reasons that evaluating the management team matters so much:

• Executives make crucial capital allocation decisions that impact long-term business value. Suboptimal choices can destroy shareholder wealth.
• Management sets the corporate culture and morale as vital intangible assets. Talent retention needs better leadership.
• Execs are closest to the business operations and competitive landscape. Investors want managers to think strategically for the future.
• Management guides the investor relations tone and transparency. Secure executives engage openly with shareholders.

Takeaway

Analyzing business strategy is only complete with a robust examination of the management team executing that strategy. The management team’s capital allocation track record, incentives, and the company culture they set provide valuable insights. The GW Investment Institute BMPB framework emphasizes evaluating the management team.

The inaugural GW Ramsey Scholars Investment Summit held on September 30, 2023 marked a significant milestone for the GW Investment Institute (GWII) and The George Washington University more broadly.

The summit brought together GW President Ellen M. Granberg; School of Business Dean Anuj Mehrotra; GWII Director and Vice Dean Rodney Lake; Keynote Speaker, President, and Director of Research at Sands Capital, Perry Williams; and the five cohorts of accomplished students who have steered the GW Ramsey Student Investment Fund to exceptional growth over the past five years.

Reflecting on the fund’s journey, Rodney Lake expressed satisfaction at the fund’s performance, stating, “None of us could have anticipated this level of success when the fund was initiated nearly two decades ago” (GW Today interview).

In her address, President Granberg commended the value proposition offered by initiatives like GWII, underscoring their role in enhancing the quality and relevance of higher education. “The question is how are we going to offer value that merits the cost,” she said. “I think [the GW Investment Institute] is one of the best examples of the value-creation proposition I have come across in my time” (GW Today interview).  

A highlight of the summit was the gathering of five cohorts of Ramsey Scholars. These scholars, spanning diverse academic, professional, and personal backgrounds, shared their experiences with GWII courses highlighting the impact that GWII had on their career trajectories. The summit also served as an opportunity for networking and knowledge exchange among Ramsey Scholars and current students.

To conclude, the 2023 GW Ramsey Scholars Investment Summit was a celebration of the success of GWII and the transformative potential of experiential learning. Thank you to everyone who joined us. We look forward to the next GW Ramsey Scholars Investment Summit on October 19, 2024.

Note: The quotes presented in this blog post were derived from a published article by GW Today.

In an interview conducted by Rodney Lake, Director of the GW Investment Institute (GWII), Dr. Randy Graves, an esteemed alumnus of George Washington University (Class of 1978) and former Director of Aerodynamics at NASA, shared about his time at GW and his decision to leave a lasting legacy through a generous donation to GWII.

Reflecting on his time at GW, Dr. Graves spoke about the profound impact the university had on shaping his education, career trajectory, and personal growth. He reminisced about pivotal moments, influential mentors, and transformative experiences that led him to the forefront of NASA’s Aerodynamics division.

Central to the conversation was Dr. Graves’ belief in the importance of giving back to institutions that have enriched our lives. He emphasized the symbiotic relationship between education, innovation, and philanthropy, highlighting the crucial role universities play in shaping future leaders and fostering groundbreaking research and discovery.

Dr. Graves’ decision to support GWII demonstrates the ripple effect of investing in future generations. His legacy gift serves as a testament to the enduring impact of education and the profound influence of individuals who choose to pay it forward.

Dear Friends and Supporters of the GW Investment Institute,

As we embark on another exciting semester at the GW Investment Institute (GWII), I wanted to take a moment to update you on our latest endeavors, achievements, and upcoming events. A Warm Welcome to Our New Students The fall semester of 2023 began with great enthusiasm as we welcomed a new cohort of students to GWII classes and the community. It has been a pleasure to meet these bright minds and learn more about their aspirations in the world of finance. Our Educational Offerings This semester, GWII is proud to offer three classes, engaging 45+ undergraduate students and over $2.7 million in Assets Under Management (AUM). These classes provide students with the opportunity to gain practical experience in investment management and develop critical skills for their future careers. Applied Financial Securities Analysis Undergraduate students in this class manage the GW Phillips Student Investment Fund, a diversified listed equity portfolio with over $2.6 million in AUM, as of 09/18/2023. We have two sections of this class — I teach one and another is taught by Professor Christine Song. Investing in Real Estate Investment Trusts (REITs) Undergraduate students in this class manage the GW Real Estate Student Investment Fund, a diversified portfolio of publicly listed REITs with over $145,000 in AUM, as of 09/18/2023. In this class, our students hone their skills in security analysis specific to REITs and real estate. I also teach this class. Quarterly Report Our students continue to outperform the benchmark (S&P 500 Index), please see the most recent quarterly report as of June 30, 2023 with market commentary by GW senior Leon Kamenev.  Cornell’s Women in Investing Conference We’re gearing up to send a team of four talented undergraduate women to Cornell’s Women in Investing Conference (WIN) in Boston on September 28th and 29th. Rhys Chambers, Elizabeth Ellis, Nicolle Ugarte, and Sandy Huang Yin are excited to represent GW among eleven other U.S. schools.

Please accept my sincere gratitude for your unwavering support. Your commitment and contributions play an instrumental role in providing our students with invaluable experiential learning opportunities. As we navigate through this semester, I am confident that the GW Investment Institute will continue to thrive, thanks to the dedication of our students and the support of our esteemed community.

I look forward to the exciting developments and achievements that lie ahead.

Best regards,

Rodney E. Lake
Director, GW Investment Institute

During the quarter that ended on June 30, 2023 the GW Investment Institute (GWII) hosted 14 industry professionals across four finance classes, held two stock pitch days, completed the spring 2023 semester classes, and held the annual GW Ramsey Scholars Ceremony to award the top 10 students in GWII classes with $50,000 total. The following commentary was written by Leon Kamenev, a GW undergraduate student, graduating in 2024 with a double major in Finance and International Affairs.

Full Report: GWII Quarterly Report June 2023

Overall, equity markets performed positively, with the S&P 500 up 8.7% over the past quarter. Markets reacted positively to lower inflation numbers. The year-over-year CPI in June decreased to 3.0%, the lowest in two years. The Federal Reserve paused its rate hikes during the quarter. It kept the range of the Federal Funds rate between 5.00% and 5.25%. Other economic indicators such as a strong labor market and consumer spending figures have caused recession fears to quell and fuel further optimism for markets. 

Not all sectors have benefited from the rally this past quarter. Energy (-0.89%) and Utilities (-2.53%) were the laggards, most likely due to lower oil prices and slower growth in China and Europe. Financial Services (5.33%) have rebounded from their poor performance in Q1 2023 as a result of the turmoil in the regional banking industry. Communication Services (13.06%), Information Technology (17.20%), and Consumer Discretionary (14.58%) were the leaders in the index, due to the positivity surrounding developments in Artificial Intelligence (AI) and strong consumer resilience. 

For the quarter that ended on June 30, 2023, the GWII’s Student Investment Funds in aggregate outperformed the benchmark with a return of 9.8% vs. 8.7% for the S&P 500, while also outperforming the benchmark in the past one year at 24.7% vs. 19.6% for the S&P 500.