Brown Advisory Fund

Portfolio Insights

January 1, 2018

The Washington College Brown Advisory Student-Managed Investment Fund experienced impressive growth throughout the entirety of 2017. Our portfolio, which is currently made up of 39 positions, grew to a value of $906,998.43 by the close of December 2017, marking the first time in the fund’s history that the portfolio surpassed the $900,000 threshold. Some of our top performing positions included Apple (AAPL), McDonald’s (MCD), Johnson and Johnson (JNJ), Pepsico (PEP), Honeywell (HON), American Water Works Company (AWK), and Southwest Airlines (LUV). Recently, after careful consideration and adequate discussion, our student members made the decision to execute the sale of two of our weaker performers, Mastercard Inc. (MA) and Eagle Bank Corporation (EGBN), as well as to pursue the acquisition of some promising new positions in Palo Alto Networks Inc. (PANW) and Raytheon (RTN).

Palo Alto Networks is a cyber security company based out of Santa Clara, California offering a wide array of products and services in a variety of industries.  With automation growing at a faster pace than ever, we believe that Palo Alto Networks offers a great opportunity to capitalize on the growing concern over cyber security and the prevention of attacks.  Raytheon is a diverse company in the aerospace and defense industry headquartered in Waltham, Massachusetts, with four major business operations: Integrated Defense Systems, Intelligence/Information/ and Services, Missile Systems, and Space and Airborne Systems.  Raytheon is a strong company with a promising performance track record. We believe that the defense and cyber security aspect will allow us to further diversify our portfolio. 

One company our team took a special interest in throughout the fall of 2017 was Blue Buffalo (BUFF), a business that specializes in quality pet products. We liked everything about the company, from its ownership and management to its personality and product line. Since acquiring a position in Blue Buffalo, the stock has experienced steady growth, and it is expected to continue that trend moving forward.

A standard benchmark we often use to gauge the success of our portfolio is that of the S&P 500. In 2017, the Brown Advisory Student-Managed Investment Fund grew by 25.20%, while the S&P grew by 21.80%. As the graph below indicates, the Brown Advisory Student-Managed Investment Fund experienced a surge in growth between September and October, outpacing the S&P 500 for 2 consecutive months before dropping below the S&P’s rate of growth in December.  

Participating in the Brown Advisory Student-Managed Investment Fund program provides Washington College students with the ability to work closely with investment professionals, learn about the ins and outs of the global market, and gain real-life experience in managing a diversified portfolio. The opportunity to work with real money, as well as to be able to observe the effects of specific actions or decisions on the portfolio’s performance is an experience that students do not have access to in any traditional class or investment club. The program is truly unique, and it is a fantastic tool for students considering a future in any finance or business-related industry to learn more about the how the market works.