Bowden Investment Group Annual Report | 2022-23

The History and Purpose of Bowden

About the Group

TheBowdenInvestmentGroup(BIG) aims to create an active learning environment for high-achieving inance and banking students within the Walker College of Business to gain practical investment management skills. In addition to managingaportfoliowiththegoalof outperforming the S&P 500 benchmark, the BIG prioritizes the personal and professional developmentofits12undergraduate members. These members are strategically chosen for their roles in guiding, leading, and educating each other. The Bowden Investment Fund comprises equities and ETFs worth approximately$300,000.

Bowden group members hold various positions, including President, Vice-President, Industry Analysts, Accountants, Economic Analysts, and BIG Update Editors. Recently, the BIG added two ESG Analysts to evaluate the environmental, social, and governance risks of current and future holdings. These roles are intended to enhance the group's commitmenttoresponsibleinvesting and teach team responsibility and functionality.

History of BIG

The Mountaineer Investment Club was founded in 1994 by Dr. Delbert Goff and Dr. Don Cox seeking to provide students with the opportunity to learn practical investing strategy using real funds. However, the lack of funds and high student turnover presented serious issues for proper portfolio management. And so after liquidating the original portfolio in

1998, the two faculty members set out to raise funds for a studentmanaged investment fund. Following the patronage and inancial contributions of Dr. Elbert V. Bowden, the “Elbert V. Bowden Student-Managed Investment Fund” was formed in 2001. The program celebrated its 23rd year in 2022 and continues to provide curious and dedicated student-investors with a one-of-a-kindlearningexperience.

Initially, Dr. Cox taught students portfolio management and allowed them to make investment decisions until he was appointed Associate Dean of the Walker College of Business. In 2004, Dr. Goff took over as faculty advisor and continued to provide valuable guidance to the students managing the fund. Mr. David Thompson, a former General Partner and CFO of WEDGE Capital Management joined Dr. Goff in 2010 as Executive-in-Residence for the Bowden Investment Group. In 2018, Dr. Goff and Mr. Thompson welcomedDr.BrandyHadleyandMr. ShawnPooletothegroup.Dr.Hadley, a two-time Appalachian State alumna, now serves as the group's facultyadvisor,whileMr.Poole,acofounder and former CFO of several companies, serves as the current Executive-in-Residence.

The Bowden Investment Group has come a long way and is now one of the most prestigious groups in the Walker College of Business. The current members extend their gratitude and appreciation to everyone who has assisted them in gaining this incredible and unique experience.

Investment Process and Strategy

TheBowdenInvestmentFund(BIF)ismanagedintandemby12selectivelychosenequityanalysts appointedtothepositioneachyear. Duringthefallsemester,thoseequityanalystsaretrainedto

A Letter from the President

This year will de initely be one to remember – a year that started at the bottom of the mountain with uncertainty in the market, paired with a group of eager students ready to give their all to climbtothetopandreachthesummit.

I could not be happier to have had the opportunitytoleadthisprestigiousgroup.Joining theBowdenInvestmentGroupwasagoalofmine sinceIsteppedfootoncampusinthefallof2019. I learned about this group from a family friend and after some research, I was impressed with thehistoryandsuccessthathadbeenbuiltbythe priorgroups.IknewimmediatelythatIwantedto beapartofthisgroup.COVID-19hitinthespring of my freshman year and pushed us into virtual classes. Junior year then arrived out of nowhere and I knew that in the spring semester, I would have the opportunity to inally apply to this group.AssoonasIreceivedtheacceptanceemail, it felt as if all the effort I put into securing this opportunity had paid off. However, that was just the beginning. I was aware that much more was expected to help preserve and build the reputationoftheBowdenInvestmentGroup.

Starting in the summer, the group was tasked with developing the basic knowledge to successfully model a company, using Wall Street Prep as a guide. I remember the irst time I openeduptheLowes10-Kasitwasmy irsttime ever opening up a 10-K ever. My jaw dropped to the loor. It was very relieving when I consulted my fellow teammates and they had the same feeling. Throughout the summer, many of the group members completed internships, studied abroad, and traveled with their families, which led to Zoom meetings at odd times to work our way through this model. This is when I felt the group was starting to come together. This momentum led into the fall semester where we started to really get to know the personalities of oneanotheraswecompletedBIGday,traveledto NYC, and worked together outside of the classroom.

At the end of the fall semester, our group

presented their inal stock pitch presentations. I felt so proud as I watched all the hard workweputin throughout the semester come tofruition.AsI mentioned previously, it wasn’ttoolong before then that many of us had never even opened a 10K. During those presentations, thecon idenceconnectedwiththeconvictionand passion of each member showed me just how invaluablethislearningexperiencehasbeen.

Thegrowthandknowledgegainedthisyearhave been immeasurable. As a team of eleven members, we have been able to grow closer togetherandIbelievethatwecanallsaythatwe have gained life-long relationships. The assignments provided throughout the year were very crucial and allowed this once-inexperienced group the ability to grow into the experienced group that we are today. We are so thankful for the help andsupport ofDr. HadleyandMr. Poole forpushingeachandeveryoneofustogrow,day inanddayout!

In conclusion, we extend our heartfelt gratitude to our generous donors for their invaluable contributions, to the alumni who have blazed the path, and to our dedicated faculty advisors who have left a profound impact on our lives. Your unwavering support has made this journey a realityandweareforeverthankful.

GoAPP!

JonathanFogle

A Letter from Our Advisors

On behalf of the Bowden Investment Group, it is our pleasure to present the 2022 Annual Report, representing the achievements of the BIG Classes of 2022 and 2023. Despite facing unique learning opportunities, including continued lessons in in lation, interest rates, anddown markets, the groups have not only grown their understanding but also surpassed their benchmark performance. We are inspired by the tremendous growth, dedication, and commitment to excellenceexhibitedbythestudents,andweareproud of their determination, hard work, and personal and professionalgrowth!

We are also proud of the Bowden Investment Group’s commitment to experiential learning through participation in several external competitions this year. The 2021-2022 group participated in the CFA InstituteResearchChallenge,theUniversityofGeorgia Stock Pitch Competition, as well as the University of Michigan ENGAGE Stock Pitch Competition, with two teamscompetingforthe irsttime.The2020-2021CFA IRC team was named North Carolina Champions as well as Southeastern U.S. Champions. The 2022-2023 group has also been involved with the CFA Institute Research Challenge, the University of Georgia Stock Pitch Competition, and the McGill University Stock PitchCompetitionforthe irsttime.

We are also pleased to report the strong career placements of the 2022 and 2023 Bowden Investment Groups. Members have secured positions at excellent companies such as Bank of America, Campbell’s, Change Healthcare, Dimensional, FORVIS, Guy Carpenter,JPMorgan,Lowe’s,MSC,andWellsFargo.

TheBowdenInvestmentGroupisnowintheprocessof selecting the 2023-2024 group. We are excited to continue the cycle of selection, potential, anticipation, struggle,growth,maturity,andgraduation.

Finally,wewouldliketoexpressourgratitudetoallof our BIG supporters! Your support is essential to the successoftheBowdenInvestmentGroup.

Thankyou!Asalways,GoBIG!

Brandy Hadley, Ph.D.

Economic, Accounting, Sector, and ESG Analysis

2022 Economic Re lection and Outlook

The year 2022 was marked by signi icant turbulence in the inancial market, characterized by a notable surge in equity markets in January. This is depicted in Figure 1, created on TradingView, whichwasthenswiftlyfollowedby a decline over the subsequent months due to heightened in lation and Russia's incursion into Ukraine. Consequently, in lationary pressures necessitated the implementation of monetary policy tightening measures, thereby marking the endofquantitativeeasingfour(QE4).

the 1980s, as shown in Figure 2, presented by TradeEconomics and the U.S. Bureau of Labor Statistics. This in lationary pressure was primarily attributed to rising energy prices, which consequently drove up costs across the economy, largely as a result of heightened geopolitical tensions between the East and West. Despite the sustained in lationary pressure, the Federal Reserve Open Committee (FOMC) maintainedthatthein lationwastransitory,with factors such as ongoing supply chain disruptions and geopolitical tensions between Russia and Ukraine being the main culprits. However, as in lationary pressure persisted and transitioned from goods to services, the Fed's credibility was calledintoquestion.

Quantitativeeasingisamonetarypolicytoolused by governments to stimulate the economy by increasing the money supply. This is completed by purchasing government bonds or other securities from inancial institutions, thereby increasing their reserves and encouraging economic growth. Quantitative tightening functions oppositely. It is a monetary policy tool usedbygovernmentstoreducethemoneysupply in the economy. This is typically done by selling government bonds or other securities back to inancial institutions, which reduces their reservesandmakesit lesslikelyforthemtolend money. The goal of quantitative tightening is to control in lation and prevent the economy from overheating, but it can also lead to slower economic growth and higher unemployment in theshortterm.

In lation, Interest Rates, and Federal Funds Rate

Throughout 2022, multiple economic indicators experienced volatility, with June witnessing a surge in in lation to 9.1%, the highest level since

The Federal Reserve took measures to combat in lation in 2022. In March, theyended QE4after injecting $4.5 trillion into the economy, and increased the federal funds rate by 25 basis points.QT3beganinJune,butwasacceleratedin September with a plan to reduce the $9 trillion balance sheet by $90 billion per month. This is signi icant as the US Money Supply (M2) has consistently increased every year since 1959, with the smallest increase being 0.3% in 1994 and the largest being 25% in 2020. However, 2022 was on track to be the irst year in over 60 years where the Money Supply has decreased by 0.6% YTD (Figure 3). Some criticized the FOMC for delaying action and only beginning QT and hiking the federal funds rate when in lation had already reached 8.5%. The delayed action taken by the FOMC, while understandable, contributed topersistentin lation.

Figure1:S&P500Performance2019-2023

Source:TradingView

Figure2:UnitedStatesInlationRate

Source:TradeEconomics;U.S.BLS

Fixed Income

In 2022, the ixed-income market was characterized by a combination of economic indicators that both supported and challenged the performance of bonds. On one hand, the global economicrecoveryandlow -interest rate environment created favorable conditionsfor ixed-income investments. The gross domestic product (GDP) growthinseveralcountries increased which led to higher consumer and business con idence, consequently boosting demand for ixed-income securities. However, the ixed-income market was also impacted by several negative indicators in 2022. We witnessed in lationary pressures rise due to increases in commodity prices, which led to further concerns of interest rate hikes by global centralbanks.Asaresult,theyieldon10-yearUS Treasuriesrosetolevelsnotseensincebeforethe COVID-19 pandemic (Figure 4). The attractiveness of bonds as an investment option

tends to decrease in an environment where interest rates are increasing due to the inverse relationship between rising rates and bond prices. When interest rates rise, the value of previously issued bonds decreases, because investorscanearnahigherreturnbyinvestingin new bonds. Furthermore, the price of any asset, including bonds, should be equal to the future cash lows discounted back to the present. Increasing the discount rate would inherently lower the bond's current price, while lowering the discount rate would increase the bond's value. Also, the increasing sovereign debt levels in some countries created uncertainty in the market and added to the risk associated with ixed-income investments. Despite these challenges, the ixed-income market remained crucial for many portfolios, offering stability and a relatively low level of risk compared to other investmentoptions.

Overall, the ixed-income market in 2022 was in luenced by a combination of economic indicatorsthatbothsupportedandchallengedthe

Source:CharlieBilello;FRED

Source:InvestmentStrategyGroup;Ibbotson;JPMorgan

Figure4:Rolling3-yearand10-yearCorrelationsofBondsandEquities

performance of bonds, creating a complex investmentenvironmentforinvestors.

Commodities

In 2022, the commodity market saw a signi icant rebound from disruptions caused by the COVID19 pandemic in previous years. Some commodities such as copper, iron ore, and oil increased in demand due to global economic recovery, coupled with infrastructure investmentsmadebyseveralcountries,leadingto increasing production costs. The rapid growth of the renewable energy sector also drove the demand for commodities such as lithium, cobalt, and nickel. However, challenges also emerged in this period. Trade tensions between countries, such as China, the USA, India, Brazil, and others created uncertainty in the market leading to luctuations in prices. Despite the challenges facingthecommoditymarketin2022,themarket remained strong due to robust demand from various sectors, and concluded the year with positive returns in the commodity sector. The market is expected to continue its upward trend in the coming years as the global economic recovery continues, China ends its zero-Covid policy, and investments in infrastructure and renewableenergyremainstrong.

2023 Economic Outlook

Although 2022 has been a turbulent year, we anticipate a markedly different economic landscape in 2023 as in lation persists and interest rates are raised further. The Federal Reserve Open Committee has stated their intentiontomaintainhigherratesforaprolonged periodwhileaimingtoachieveasteadydeclinein in lation. In spite of this, we expect equity markets to remain relatively strong in the irst half of 2023 due to robust consumer spending, labor market strength, and better-thananticipated earnings. However, we anticipate volatility in economic indicators due to elevated revisions that will be underestimated by the markets. Furthermore, we foresee economic weaknessemerginginthesecondhalfoftheyear (inQ3andQ4)asaresultofthedelayedimpactof ratehikes,whichtypicallytakesabout12months to manifest. Moreover, should excess consumer savings continue to decrease, this will likely lead

to a decrease in consumer expenditures. This reduction in consumer activity could lead to a negative impact on corporate earnings. Despite these challenges, we anticipate that M&A activity will persist in industries such as healthcare, industrials, andtechnologydue to low valuations andsubstantialcashreserves.

While we expect globaleconomic growth to slow down in 2023, we believe that there are regions andindustriesthatwillcontinuetoshowrelative strength.Forexample,wehavestrongconviction that commodity-driven companies will bene it going forward. Following a decade of underinvestmentincommodities,ESGfactorsare becomingincreasinglyimportanttoinvestorsand consumersalike.Oneparticularareagrowingata record pace is electric vehicles. Electric vehicles are heavily dependent on several metals, such as lithium,cobalt,andcopperforvarioususesinthe production of batteries. In addition, we believe Emerging Markets will continue to show relative strength to developed countries. The reasons behind this include reduced levels of dollardenominated debt, currencies that have strengthened against the dollar, slower relative growth relative to developed markets over the last two decades, and future growth prospects buoyedbyrapidtechnologicaladvancements. Furthermore, escalating geopolitical tensions continuetopromptconcernsabouttheimpacton global economic conditions and the threat to globalization. The ongoing con lict between Russia and Ukraine has reached a heightened state as it enters its second year. Additionally, rising tensions between China and Taiwan are apparent. However, the West continues to decrease dependence on items made in China. Meanwhile, according to an economist from John Hopkins, Steve Hank, Turkey accelerates its exports driven by its currency devaluation, weakening economy, and sky-high in lation. GivenChina's irstpopulationdeclineinacentury and the aforementioned increase in geopolitical tensions,itisprobablethatthistrendwillpersist, enabling further growth for other developing economies.

In summary, 2022 was a turbulent year for the inancial market, with signi icant luctuations in

manyeconomicindicators.In lationarypressures persistedthroughouttheyear,withrisingenergy prices and geopolitical tensions being the main culprits. The Federal Reserve took measures to combat in lation by ending quantitative easing and implementing quantitative tightening measures. The ixed-income market experienced a decline in performance due to increasing interest rates. This resulted in one of the worst recorded performances for the debt market. The commodity market saw a signi icant rebound from the disruptions caused by the COVID-19 pandemic in previous years, with strong demand fromvarioussectorsdrivingthemarket'supward trend.

As we re lect on the challenges of 2022, we

anticipate the economic landscape in 2023 to remain similar, characterized by persistent in lation and further increases in interest rates. The Federal Reserve Open Committee has stated its intent to maintain elevated rates for an extended period while striving for a steady decline in in lation. Despite these headwinds, we expectequitymarketstoremainrelativelyrobust in the irst half of 2023, buoyed by resilient consumer spending, a strong labor market, and better-than-expected earnings. Nonetheless, we foresee elevated volatility in economic indicators due to underestimated revisions, potentially leading to economic weakness in the second half of the year, with a concomitant decline in consumerspendingandcorporateearnings.

2022 Fund Performance and Best Performer

In 2022, the Bowden Investment Fund returned -11.10%, outperforming the benchmark (SP500TR, -18.11%) by 7.01%. The nominal return resulted in a loss of $33,196.32. With the

biggest nominal return coming from DFAT (+$46,769.27), and the lowest nominal return attributedtoHD(-$17,845.43)(Figure1).

Figure1:CumulativeWaterfallChart

The current holdings of the fund are made up of many Bowden group pitches, with the oldest stockbeingGOOGL,boughtinJanuaryof2011.In the past year, the fund bought: KO, MSFT, DIS, BLK, MLM, DFAT, and increased our IVV position and the fund sold: LMT, STLD, HEAR, IWM, DIS, CRM,FB,HD,XLF,AAP,andSYK(Figures2&3.)

negative (Figure 6), with the worst performing sectors beingCommunication Services (-26.31%) with holdings in GOOGL, DFAT, IWM, and IVV. followed by consumer discretionary (-14.83%) withholdingsinAMZN,HD,AAP,DG,DFAT,IWM, HEAR, DIS, and IVV. However, our holdings in both of these sectors outperformed their respective S&P sector returns. The bestperforming sectors in the portfolio were energy (+17.02%) with holdings in SHEL, followed by industrials (+5.80%) with holdings in AGCO. The S&P500hadthesameworstandbest-performing sectors as the Bowden Investment Fund with communication services down -37.63% and energy up 64.17%. Our portfolio outperformed seven of the eleven sectors in the S&P 500, only underperforming in healthcare (CVS and SYK), energy (SHEL), Utilities (DFAT, IVV, and IWM), andconsumerstaples(KO).

STLD was our best performer of 2022, earning 39.42% in January through March when it was sold. Our worst performer of 2022 was AMZN (-49.62%)(Figure4).Thispoorperformancewas largely due to its Q1 and Q3 earnings. The company missed earnings due to high in lation, rising rates, and a slumping economy. The Bowden Investment fund outperformed the S&P 500 almost every month this year, only underperforming in March, July, and November (Figure5). Thisislikelyduetothefundhavinga lower beta than the benchmark, therefore underperforming when the benchmark had positivereturns.

Most sector returns in our portfolio were

Figure2:PositionsPurchased

Figure3:PositionsSold

Figure4:IndividualReturns

Figure5:2022MonthlyComparison

During 2022, we saw many active funds outperforming passive strategies which has been unusual for some time. With that being said, we wereabletooutperformmanyactivemanagersin addition to our passive benchmark. According to MorningStar, the average loss for large active growth funds was 30%. We see this with American Funds The Growth Fund of America, Fidelity Contrafund Fund, BlackRock Large Cap Focus Growth Fund, and BlackRock Mid-Cap Growth Equity Fund which had returns of30.72%, -28.26%, -38.06%, and -37.52%, respectively. In addition to this, we were able to outperform many large blend funds such as American Funds The Investment Company of America, Strategic Advisers Fidelity U.S. Total Stock Fund, Vanguard PrimeCap Fund, and Morningstar Large & Mid-Cap U.S. Equity ETF ILCB with returns of -15.51%, -17.95%, -15.15%, and-19.48% respectively(Figure7).

a negative allocation effect in all the sectors that the fund was overweight, with the exception of Energy, incomparisontoourbenchmark. Thisis duetoourbenchmarkhavingnegativereturnsin allthesesectorswiththeexceptionofenergy,and bythefundbeingoverweightinthesesectors,we saw more losses. Those sectors include: consumer discretionary, inancials, industrials and materials. However, we saw a positive selection effect in over half of the sectors including: consumer discretionary, information technology, communication, industrials, and consumer staples, meaning that the equities chosen in each sector did better than our benchmark in that sector. We believe that this positive selection effect has to do with having morestablestocksinthesesectorsincomparison toourbenchmark.

We performed an attribution analysis on the portfolio in order to understand how our sector weightings compared to our benchmark returns aswellashowourspeci icholdingscomparedto thebenchmarkineachsector. (Figure8).Wesaw

Finally, we calculated up- and down-capture ratios for the portfolio to analyze the fund’s ability to avoid market losses and capture market gains. We found that the portfolio had a down-capture of 87.26% for 2022, which means that theportfolioonlycaptured87.26%of the negative returns of our benchmark, the S&P 500. In this analysis, we also found that our portfolio had an up-capture ratio of 107.31% for 2022, meaning that we capitalized on 107.31% of our benchmark’s positive returns. This resultedinthefundhavingatotalcaptureratioof approximately 123% which compares the upcapture ratio to down-capture ratiotoshowhow the fund captured returns in total to the benchmark.

Figure6:2022SectorReturns

Figure7:BIFcomparedtoS&P,GrowthandBlendFunds

Figure8:2022AttributionAnalysis

The 2022 Stock Pick of the Year was Steel Dynamics (STLD). Steel Dynamics, Inc. manufactures steel and recycles metals, holdingapproximately7%ofthemarketshare in the domestic steel manufacturing industry. The industry is cyclical and luctuates heavily in correspondence with the commodity price of steel. The company was founded in 1993 and headquartered in Fort Wayne, Indiana. Steel Dynamics was added to the portfolio on December 8th, 2021 and sold onMarch23, 2022. Thiscompanywaspitched by Bowden Alumni Zack Marciniak and Matt Ramundo with a target price of $82.00pershare. Itquicklyexceededthe target price andwassoldat $86.54. The thesis for this pitch was to diversify the portfolio’s exposure in commodities and industrials, capitalize on STLD’s vertically integrated and closed-loop business model, and bene it from Steel Dynamicsbeinganenvironmentalleader in the steel industry. STLD was our best performer of 2022, returning 39.42% in JanuarythroughMarch,whenitwassold. Steel Dynamics provided the portfolio withanominalgainof$4,990.76in2022.

Figure9:SteelDynamicsReturn

Figure10:Year-endHoldings

Figure11:BIFvsS&P500Cumulative2022Returns

2022 Sector Performance

Consumer Staples (6.68%)

The Bowden Investment Fund has allocated 4.08%oftheportfoliotoTheCoca-ColaCompany (KO), and the remaining sector holdings are comprised of ETFs including iShares Core S&P 500 (IVV), iShares Russell 2000 (IWM), and Dimensional US Targeted Value (DFAT). The consumer staples sector has demonstrated remarkable stability throughout history, making itareliablesourceofconsistentreturnsduringall economic conditions. In this industry, pro it margins and price elasticity win. During uncertaintimesit’sbesttoreweightaportfolioto companies that have pricing power, as they are abletopassonin lationarycoststoconsumers.A perfect example is aluminum prices rising to record highs, and despite rising input costs beverage companies continue to show strong performancewithhighermargins. Ourdefensive investment in KO has provided stability, along withdividendsandshareappreciationinthepast year. Staples inished 2022 especially well and outperformed the broader market during the year. Going forward, companies with a solid dividendandgrowingmarketsharewillcontinue to do well; be wary of companies that are purely low-cost and struggle to raise prices with in lation. Based on the stability and pro itability of the consumer staples sector, and the pricing power, an overweight recommendation is warrantedforthissectorgivencurrenteconomic uncertainty.

Healthcare (7.87%)

Overthecourseof2022, theBowdenInvestment Fund held two healthcare sector companies: Stryker Corporation (SYK) and CVS Health Corporation (CVS). Stryker manufactures and sells a large variety of medical devices. Stryker was sold in the spring of 2022, because of its exceptional performance and price appreciation, which bolstered the Bowden Investment Fund signi icantly. CVS Health is a healthcare solutions company featuring brick-and-mortar stores with walk-inpharmacies,“MinuteClinics,”healthplans for purchase, and general merchandise. CVS is currently held in the portfolio. While CVS’ share

pricehasnotre lectedit,membersoftheBowden Investment Group believe in the health Care sector, as a methodical, long-term play with a high probability of notable capital appreciation. In particular, the United States (and global) population is growing older, with greater life expectancies,andwithanolderpopulation,there is a higher prevalence of chronic disease and the needforhealthcare.Thehealthcaresectorisvast. Thelargestmarketsarehealthcareprovidersand services, pharmaceuticals, and health care equipment and supplies. Based on the growing global population, increasing life expectancies, and higher prevalence of chronic diseases, an overweight recommendationiswarranted.

Materials (7.25%)

While materials are usually a safe bet, rising interest rates are curtailing home buying, and thus also affecting home building. At the commercial level, investment decreases as the cost of capital increases. Not to mention, many rawmaterials,duetoexternalfactors,arealready at record high numbers. Yet, federal spending may balance out the negative effects. A key to noteisthatinanextendedtimeframe,weexpect materialstodowell.However,thatcouldbemore extended than worthwhile. The BIF currently holds Martin Marietta Materials, Inc, (MLM), a domesticconcreteandaggregatesproducer.Steel Dynamicswasalsoheld,andsubsequentlysoldin 2022. It was the portfolio’s single top performer. Steel Dynamics is a domestic steel producer and metal recycler founded in 1993 in Indiana. Going forward, regardless of economic outcome, the industry analysts rate Materials as a hold to sell, as there are limited excess growth opportunities. We provide an underweight recommendation for the Materials industry based on the potential negative impact of rising rates, along with high numbers of raw materials and limited growth opportunities.

Utilities (0.74%)

Similar to materials, with volatile electricity and natural gas prices, there is uncertainty in the industry. In Europe, electricity prices are at all

time highs, diminishing demand, especially heading into the summer months. However, in America, demand for power is expected to continue rising, while natural gas prices are falling,whichbene itsutilitycompanies.Also,less federal regulation could pose bene icial to the industry. Utilities are recommended in 2023 due to the softened volatility, strong dividends, and quality growth opportunities present. An overweight recommendation is justi ied consideringtheanticipatedincreaseinU.S.power demand, the potential advantages resulting from reduced federal regulation, and the sector’s strong dividends and quality growth opportunities.

Energy (8.07%)

Some key drivers for this industry are the world price of crude oil, and consumer demand for fuel at gas stations. During the pandemic, as oil demand dropped, the industry fell. Yet, at this point, the industry has largely recovered and is expected to continue to recover, as fuel prices stay high. However, as far as service stations go, the rise ofEV’sisa threat tokeep an eye on.The BIF hasheldRoyalDutchShell(SHEL)foralmost a year, and has enjoyed the returns energy has provided in the past months. We give an overweight recommendation to the energy industry as the price of crude oil and consumer demand for fuel at gas stations is continuing to increase.

Industrials (10.55%)

Withthepandemicandthedollarbeingsostrong, exports have been hurt substantially. Domestically, demand for industrials is driven primarily by manufacturing activity. With manufacturing expected to increase going forward, there could be an opportunity for this industry. Yet, with the industry primarily driven by irst-use-steel, it is certainly volatile, as irstuse-steel consumption is not in extremely high demand. In 2022, we exited our position in Lockheed Martin following substantive share appreciation stemming partially from rising tensions leading up to the Russia-Ukraine war. Now, the portfolio features AGCO, an industrial farmsupplymanufacturerwhodirectlycompetes withJohnDeere.Ithasbeenatopperformerover

2022. Furthermore, the BIF holds DFAT, an ETF by Dimensional Fund Advisors that focuses heavily on industrials. We give an overweight allocation to the industrial sector to balance the potentialrisksandrewardsinthissector.

Information Technology (24.29%)

Thetechnologysectorfacedchallengesin2022in parallelwiththebroadermarket,ashighin lation and rising interest rates impacted the sector. However, despite growing recession risk, the need for companies to use technology to reach their customers, innovate quickly, and operate ef iciently remains constant, driving demand for constant innovation. We maintain ourcon idence in the robustness of Apple (AAPL), Visa (V), and Microsoft (MSFT), which have demonstrated resilience within the sector throughout the year, and remain strong companies held in the BIF portfolio. We give an underweight recommendation to the information technology industry with the possibility of higher interest ratesaffectingtheirbusinessoperations.

Communication Services (5.52%)

Investors in the communication services sector faced concerns that caused market volatility in 2022. The communications industry has seen increasedcompetitiononpriceduetoamultitude of similar products and high ixed costs, leading to harmful price wars. However, low threat of entry, given the economies of scale that the largest companies have achieved, and recent mergers and acquisitions are indicative of a maturingindustry,strengtheningthecompetitive position of the major players. The COVID-19 pandemic placed unprecedented demand on communication networks, with network operators and governments working to ensure reliable service. Operators have responded by offering free data and additional spectrum resources. All major US carriers are focused on expandingtheir5Gnetworksin2022,withAT&T planningtocoverover275millionpeopleandset up mid-band 5G spectrum for over 200 million people by the end of 2023. As the industry continues to evolve and adapt to changing circumstances,itisclearthatthecommunications services sector will play an essential role in supporting the needs of individuals, businesses,

and communities. Within the communications sector, BIF holds Alphabet (GOOGL), a player in the communications sector because it offers various communication services and its search engine is targeted for communication and marketing. Our recommendation for the communication services sector is to maintain an underweight position, considering the potential threat of economic uncertainty driven by factors such as high in lation, rising interest rates, and geopoliticaltensions.

Consumer Discretionary (12.86%)

In2022,consumerdiscretionarycompanieswere confronted with the impact of high in lation, resulting in escalated expenses related to producing,shipping,andsellingtheirproducts.In 2023, it is expected that macroeconomic factors will continue to play a signi icant role in the performance of the sector. The conclusion of the Fed's rate-hike cycle and a moderation in in lation may elicit a favorable response from investors, whereas the opposite outcome could prolonguncertainty.Nevertheless,higher-income consumers may continue to maintain strong discretionary spending, as they may not feel as inancially constrained by the effects of rising costs. Our current holdings in the BIF portfolio includeAmazon(AMZN)andDollarGeneral(DG), which we believe are well-positioned within the consumer discretionary sector. Dollar General, with its defensive capabilities against rising in lation, stands out as a strong company. Amazon is a strong contender in the consumer discretionary sector due to its dominant position as an e-commerce leader. Our recommendation forthesectorisunderweightifwebelieveweare in the late business cycle and overweight if we are in recessionary territory based on the expectationthatconsumerspendingwillcontinue to remain strong and companies with robust and loyalcustomerbasesarelikelytooutperform.

Financials (12.68%)

This sector tends to bene it from rising interest rates as it widens the gap between what they earn from loans and what they pay for deposits, which improves bank pro itability. Banks with strong deposit bases and conservative credit pro iles are better equipped to weather

macroeconomic turbulence. Such banks can also bene it from fee income, which is recurring and can provide stability for earnings during an economic downturn. Despite a potential dampening effect on overall loan growth or an increase in defaults or delinquent loans, banks that continue to maintain credit standards on loanscouldstillthrive,aslongastheycanborrow from their own deposits, which is cheaper than borrowing from other banks. The BIF portfolio holds BlackRock Financial (BLK), the largest assetmanagergloballywithjustunder10trillion totalassetsundermanagement,aswebelieveitis a strong investment in the inancial sector. We give an underweight recommendation to the inancial sector given the potential dampening effect on overall loan growth or an increase in defaultsordelinquentloans,despitetheirbene it from rising interest rates as it widens the gap between what they earn from loans and what they pay for deposits, improving bank pro itability. However, we need to watch this sectorcloselyinthemonthsahead.

Real Estate (0.97%)

In the year 2022, the performance of REITs was heavily impacted by a notable surge in interest rates. This resulted in increased expenses for REITs seeking to acquire new debt or re inance existing debt obligations and when making potential portfolio acquisitions. The rise in inancing costs led to lower REIT valuations, subsequently resulting in further increases in inancing costs. As mortgage rates continued to riseandhomepricesremainedhigh,theoptionof renting became more affordable for many individuals and families. We give an underweight recommendation to the REITs sectorduetothenotablesurgeininterestratesin 2022, which heavily impacted its performance. Whiletherisein inancingcostsledtolowerREIT valuations, we believe that the Federal Reserve will continue raising rates, therefore putting continuous strain on the real estate market in 2023.

Environmental, Social, and Governance Summary

ThisyearheldalotinstoreforourtwoESGanalysts,MorganScottandNoahDelucia,astheyresearched ESG,educatedthegroup,andledtheimplementationoftheBowdenInvestmentGroup’s irst-everESG criteria for holdings. After considering different criteria and looking at other student-managed investmentfund’sESGguidelines,theclassheldmultiplediscussionsinandoutofclass.Oncethegroup evaluated multiple ideas, a vote was held to establish ESG criteria for the Bowden Investment Fund in ordertoscreenforrelatedrisks.BelowarethecurrentESGcriteria:

Criteria 1:

ToensureourholdingsarecommittedtoESGawarenessandimprovement,eachcompanymust ilean ESGorSustainabilityReportannually.

Criteria 2:

Toscreenforsigni icantESGrisks,eachcompanymusthaveanMSCIratingofatripleB(BBB)orhigher. IfMSCIdoesnotreportonanequity,SustainalyticsisthenextpreferredsourceofESGratings.However, MSCIandSustainalyticsratingsarenotcomparablemeasures.MSCIusesascalesimilartoabondrating while Sustainalytics utilizes a scale of 0 - 40, so additional comparisons and justi ication will be necessary. The usage of a different rating agency outside of MSCI or Sustainalytics (such as ISS ESG, Re initivorFTSERussell)willrequireclassdiscussionandapproval.

Criteria 3:

Toprotectagainstrisksrelatedtoshareholderrightsandmanagerialcontrol,eachcompanymusthave an Entrenchment Index of 4 or below. Currently the Bowden Portfolio has an average Entrenchment Indexof1.33(Figure1.)

The classvoted on these three criteria withthe abilitytofreely discussexceptionsandvote tochange, add,andremoveguidelines.

Thesecriteriaareshownbelowforyearendholdings.Figure2indicatesMSCIESGratingsforholdings while Figure 1 includes Entrenchment Index scores. All holdings currently release Sustainability Reports.

Figure1:BIFHoldingsEntrenchmentIndexes

Our ESG analysts have pointed out that some companies are not yet listed on MSCI or do not provide enough information to meet MSCI’s ESG standards (Figure 2.) This is an obstacle we face as ESG reports are not yet a mandatory and universalmetricthatmustbeprovided.However, therearedeadlinessetinplacebytheSECforthe upcoming year. Throughout 2023, the SEC is planning to inalize 29 ESG-related rules and propose 23 new rules as amendments. These changes will bene it investors and increase transparency. Within the 29 rules implemented, there are three that ourESGanalystsbelievewill be most impactful. First is the requirement for publicly traded companies to disclose their GHG emissions.Currentlymostofourholdingsrelease their scope 1 and scope 2 greenhouse gasses as

shown in Figure 3. However, we are looking forward to seeing more in depth reports including scope 3 information to further reveal environmental impacts. Next are restrictions set in place by the SEC on which funds can include “ESG''intheirfundname.Thiswillhelptoscreen ESG funds that are only greenwashing for publicity purposes. Finally, investment advisors will be required to provide increased transparency on how ESG factors are considered in investment decisions further aiding with disclosureandcomparisons.

Wewereexcitedtoseethisroleincorporatedinto Bowdenandarelookingforwardtofutureclasses pushing the discussion even further as ESG becomesamoreregulated ield.

Figure2:BIFHoldingsMSCIESGRatings

Figure3:BIFScope1&2CarbonEmissions

Acknowledgments and Events

Guest Speakers

Jonathan Allen, CPA, CFP®, CLU® FinancialAdvisor,AllenWealthManagement

Mr. Allen provided us with insight into his personal career and educational experiences while walking us through the day-to-day of running a wealth management irm,highlightingtherewardsandchallenges.Mr.Allen alsoprovided us with his long-term and short-term views of the market heading into very uncertaintimes.AttheendofspeakingwithMr.Allen,thegroupwasprovidedwith important guidance for post-graduation where emphasis was placed on a healthy lifebalanceandgivingbacktothecommunity.

Chris Pavese PresidentandCIO,BroyhillAssetManagement IndustryMentorfortheCFAInstituteResearchChallengeTeam

Olivia Guillebeau InvestmentAnalyst,BroyhillAssetManagement BowdenAlumna,℅2021

Mr. Pavese and Ms. Guillebeau educated the group on multiple occasions throughout the year, sharing theiropinionsonlong-termandshort-termviewsduringaveryvolatileperiodinthemarket.Thiswas extremely bene icial as we heard from them just prior to the spring semester when we were selecting stocks to analyze and add to the portfolio. Several members of the group also had the opportunity to attend the Invest for Charlotte Summit, where we observed Mr. Pavese pitch a stock. In addition, Ms. Guillebeauwaskindenoughtobe one ofourthree judgesforourend ofsemesterstockpitcheswhere shegaveusgreatfeedbackonhowtobebetterpresentersanddevelophighqualityequityanalysis.

Gary Scott GlobalCEO,WernerCo.

Kisa Baskin ESGDirector,WernerCo.

Mr. Scott and Ms. Baskin shared their thoughts on evaluating ESG and how they’ve built standards for incorporating the developingtopicintheircompany.ThiswasparticularlyhelpfulforourESGAnalysts,NoahDeLuciaand MorganScott,asweheardfromMr.ScottandMs.BaskinwhiletheyweredevelopingtheBIG’snewESG guidelines.

Sam Kaufman AdjunctProfessorofFinance,AppalachianStateUniversity

WewerefortunatetohearfromMr.Kaufmanduringtheextrememarketvolatility in mid February as he discussed market changes, bond analysis, andhow to create newinvestment strategiesduringmarket uncertainty. Thiswasgreat forthe group aswewerebetterpreparedforthecontinuedmarketvolatilitywefaced.

Daniel Sullivan Manager,ForensicsandValuationServicesatFORVIS,LLP BowdenAlumni,℅2018

Greg Russ DirectoratFORVIS

Matt Ramundo ModelValidationConsultantatFORVIS BowdenAlumni,℅2022

WehadtheopportunitytomeetwithmultiplemembersfromtheFORVISteamwho sharedhowtheyusemodelingtechniquesintheirwork.Wealsoenjoyedlearning abouttheFORVISculture,thedifferentroleseachindividualtakeson,andhowthey utilizetheiranalysistoserveclients.Asaresultofthemeeting,multiplemembersof thegrouppursuedopportunitiestojointheteamatFORVIS.

AlumniRelationsCoordinator&FormerLeadInstructor,BowdenInvestmentGroup ProfessorEmeritus,AppalachianState

Dr.Goffeducatedthegroupontheimportanceofnetworking,aswellastheskillsit takestobesuccessfulintheworkplace.Itwaswonderfulforustobeabletohear fromoneoftheBIG’sfounders.WewouldalsoliketothankDr.Goffforbeingoneof ourjudgesduringourendofthesemesterstockpitcheswherewewereprovided withwiseandknowledgeablefeedback.

Jason Triplett

NorthwesternMarketPresident,FirstHorizonBank Finance,Banking,andInsuranceAdvisoryBoardMember,WalkerCollegeof Business

Mr.Tripletttaughtusmoreaboutcommercialbanking,networking,andgrowing localbusinesses.ThiswasveryvaluableforusasmanymembersoftheBIGare pursuingcommercialbankingcareers,andweunderstandtheextensivebene itsof relationshipbuilding.ImportantadviceMr.Triplettgaveuswasto,“Goworksomewherethatvalues youasaperson."

Brandy Smith VPofWorkplaceDiversityandCounsel,LincolnFinancialGroup

Ms.Smithtaughtusabouthowourwordscanhavealargeimpactonour environment.Asaresultofherdiscussion,theBowdenInvestmentGroupsoughtto bemoreintentionalaboutwordchoiceinclassandinourfuturecareers.

Bowden Investment Group | 2022 Annual Report

Tim Smith, CFA PrincipalatFORVIS

Alan Hodgson, CFA ManagingDirectoratFORVIS

Delbert Goff, Ph.D.

Ashley Harvey

ManagingDirector,Reporting&AnalyticsExecutiveatBankof America

Melissa Miller

SVP;BusinessStrategyandExecutionatBankofAmerica

Bailie Smith

SeniorAnalyst,GlobalLiquidityManagementatBankofAmerica

Courtney Prevette

FinancialManagementAnalyst(FMAP)atBankofAmerica BowdenAlumna,℅2022

Ryan Critcher

GlobalExpenseAnalyst(FMAP)atBankofAmerica BowdenAlumni,℅2022

Wehadthebene itofinteractingwithmultipleguestspeakersfromBankof America.Theseindividuals,alongwithKimMcKinney&ColtonWoods(not pictured),allvisitedtheBowdenInvestmentGrouptolearnabouttheirpersonal experiencesatBankofAmerica.Wehadtheopportunitytoheartheseindividuals' personalexperiencesatBankofAmericaandwhattheirprofessionalworklifeislike.Afterspeaking withthem,multiplememberspursuedopportunitiestojointheteam.Itwasparticularlyinspiringto hearfromthisgroupasalloftheseindividualsgraduatedfromAppalachianState.

Bennett Batten

AuditAssociateatWellsFargo BowdenAlumni,℅2022

Bennettvisitedthegroupandspokewithusaboutwhathisexperiencehasbeenlike postgraduationuponjoiningWellsFargo.Heprovidedthegroupwithtipsand adviceonhowtobeasuccessfulBowdenmemberandhowtouseBowdenskillsin ourcareers.

Brandy Crump

AssociateBrokeratAon BowdenAlumna,℅2022

Brandyvisitedthegroupandsharedadviceonapplyingforjobsandwhattolook forwhendeterminingwhatyouwanttodointhefuture.Weappreciatedhertimely insightaswecontinuedourcareersearchesandweighedouroptions.

Zachary Marciniak

SECReportingAnalystatMSCIndustrialSupplyCo. BowdenAlumni,℅2022

Zachvisitedthegroupandprovidedpointersonwhattodotobesuccessfulin Bowden.Inparticular,hestressedtheimportanceofunderstandingthenumbers andusing inancialanalysistotellastory.Healsogaveusadviceon indingcareers thatarethebestindividual itandsharedmoreabouthisroleandcorporate inance.

Bowden Investment Group | 2022 Annual Report

Competitions

TheBowdenInvestmentGroupparticipatesin multiplecompetitionsthroughouteachyear,with anemphasisonre iningmembers’analytical, presentation,andteamworkskills.During2022, theBowdenInvestmentGroupparticipatedinthe CFAInstituteResearchChallenge,theUniversity ofGeorgiaStockPitchCompetition,andthe UniversityofMichiganENGAGEUndergraduate InvestmentConferenceStockPitchCompetition.

The CFA Institute Research Challenge of 2022

Each year a team of three to ive is selected to participate in the annual CFA Institute Research Challenge, this team is known as the Broyhill Fellows. In the 2021-2022 academic year, the team included Zack Marciniak Shoesmith, Zane Clark, and Brandy Crump

The Broyhill Fellows were assigned to do in depth equity research and analysis on Channel Advisors Corporation (NYSE: ECOM), an E Commerce company, headquartered in North Carolina. After months of hard work and dedication, the Broyhill Fellows were announced as the local champions of the 2021 CarolinaCFAInstituteChampionshipforthe11th time. After an outstanding irst round, The Broyhill Fellows advanced to the Southeast region of the U.S. They also placed irst place, makingusthemostsuccessfullocaluniversity.

The University of Georgia Stock Pitch Competition of 2022

For the 2021-2022 University of Georgia (UGA) Stock Pitch Competition the team consisted of Devan Rigdon, Ryan Critcher, Courtney

Stock Pitch of 2022

Next, the University of Michigan ENGAGE competition of 2022 included Bennett Batten, Edward Crowther, Matt Ramundo, and Eric Rhyne. The team pitched NextEra Energy (NYSE: NEE). Along with the competitions, boththe UGA team, and the University of Michigan ENGAGE teampitchedthesecompaniesforinclusioninthe Bowden Investment Fund, to diversify the holdings in consumer cyclical and utilities sectors. Everyone worked incredibly hard to represent the Walker College of Business, Appalachian State University, and the Bowden InvestmentGroup.

The CFA Institute Research Challenge of 2023

In the 2022-2023 CFA research challenge, the Broyhill Fellows were tasked to do an in-depth analysis of Kontoor Brands, a denim company, headquartered in North Carolina. The team is made up oftwoaccountants, Charlotte Rice, and McKenzie Shail, the BIG update editor, David Price,andoneeconomist, Jimmy Said.

Ourcon idenceandsuccesswouldnotbepossible without the guidance we have received from Dr. Hadley, Mr. Poole, Mr. Pavese, and all of our competition supporters. We want to extend a thank you to all of those who have served to prepare us and offer valuable advice. We are

Trips and Firm Visits

Spring Trip to NYC

The Bowden Investment Group had a successful triptoNewYorkCityduringthemonthofMarch. The purpose of the trip was to engage with inance industry professionals and gain valuable insights into the day-to-day operations of different irms to apply in the classroom. The group was invited to meetings with Evercore ISI, VanEck, and Barings, which provided unique opportunitiestonetworkandlearnfromindustry specialists. During these meetings, the group gatheredvaluableadviceonwhattoexpectinthe irst years of their careers after graduation. The

incrediblyproudofthehardworkanddedication that every member of the BIG has demonstrated inthesecompetitions.

experience the extensive culture of the city by visiting sites such as the Statue of Liberty, Ellis Island, the New York Stock Exchange, and the 9/11Memorial.TheBIGwouldliketoexpressits gratitude to Dr. Hadley, Mr. Poole, and all the irmsandalumniwhotookthetimetomeetwith thegroup,asthisexperiencewillberemembered foryearstocome.Overall,theNewYorkCitytrip was a tremendous success and served as a valuablelearningopportunityfortheBIG.

Spring Trip to Charlotte

In April, the current and incoming Bowden classes journeyed to Charlotte, NC, for visits to multiple inancial irms and to attend the annual alumni dinner honoring Dr. Delbert Goff’s impact on the Bowden Investment Group. The group had the opportunity to learn from the experiences of hosts at Wedge Capital Management, Dimensional Fund Advisors, and Truist Financial. During these meetings, the Bowden Investment Group acquired a deeper understanding of capital allocation strategies,theprinciplesoftheef icient market hypothesis, and the integration of cutting-edge technology into the inancial sector. This trip offered the incoming class their initial exposure

into the inance industry, presenting them with opportunities to interact with industry professionals and ask questions, as well as providing them with a platform to further develop and deepen their inancial knowledge and understanding. The Bowden class also had the chance to bond and further develop relationships at TopGolf. The experience providedanopportunityforbothclassestogetto know one another and form new connections, creatingastrongfoundationforcollaborationand teamwork within the Bowden Investment Group. Finally, the Bowden Investment Group gathered with alumni and friends at RiRa’s of Charlotte to honor Dr. Delbert Goff, a founding member and signi icant contributor to the growth of the Bowden Investment Group. Dr. Goff's impactonthegroupcannotbeoverstated asheservedastheleadprofessorforover 20 years, teaching and mentoring hundreds of students. His dedication and passion for the group impacted countless students who went on to become successful professionals. The BIG expresses its deep gratitude for Dr. Goff’s contributions and for all those he has inspired.

Fall Trip to NYC

In late October of 2022, the 2022-2023 BowdenInvestmentGrouparrivedinNew YorkCityforanopportunitytomeetwith several inancial irms, and enjoy a great

learning experience along the way. The group was hosted by Stan Shipley at Evercore ISI where they were privileged to sit in on Evercore’s morning meeting. Later that afternoon, the group visited Pzena Investment Management, hosted by Mr. Pzena himself. The group was fortunate enough to observe the team’s equity screening process in action as they evaluated an investment opportunity. Finally, on Friday morning the group were guestsatBaringswheretheyparticipatedin a conversation with Matt Burns and Julie Niedzwiecki.Ourhostshappilyansweredall of the group’s questions, and shed light on Barings’ unique investing strategies in private markets. Along the way, the group toured Saint Patrick’s Cathedral, the 9/11 Memorial, and Wall Street. The group also enjoyed a meal and entertainment together at Ellen’s Stardust Diner. All in all, it was a successful,learning- illed,andfunexperiencethat broughtthegrouptogether.Thegroupwouldlike to thank Stan Shipley and our guest speakers at Evercore ISI, Mr. Pzena and the team at Pzena Investment Management, and Matt Burns, Julie Niedzwiecki, and Barings’ group for the wonderful experiences they provided. Further, theBIGisincrediblygratefulforthecontributions that made it possible for the group to complete the trip. Finally, of course, the group thanks Dr. HadleyandMr.Pooleforputtingitalltogether!

Honoring Dr. Goff at the Annual BIG Alumni Dinner

Honoring Dr. Goff’s Contributions Through the Establishment of the Delbert C. Goff Endowed Scholarship for Applied Investments

In April, the Bowden Investment Group held its Annual Alumni Dinner for the irst time since 2019,asigni icanteventthatmarkedamilestone as the world continues to recover from the pandemic.

ThegroupgatheredtogethertohonorDr.Delbert Goff, a distinguished contributor to the Bowden Investment Group. As a co-founder and advisor, Dr.Goffplayedapivotalroleinthegroup'sdesign and development, particularly in shaping its curriculum. For over 20 years, he led as the group'sheadprofessor,inspiring,mentoring,and teaching hundreds of students. Dr. Goff's dedication to presenting students with challenging work had a profound impact on the lives of his students and colleagues, a legacy that

continues to reverberate in the hallways of PeacockHallevenafterhisrecentretirement.His former students continue to bene it from his unwavering commitment to their professional growth.

Thegroupalsotookthisopportunitytoannounce the successful funding of the Delbert C. Goff Endowed Scholarship for Applied Investments, which aims to bene it many aspiring students in the years to come. Over the summer, over $40,000 was raised in honor of Dr. Goff’s contributions, which will provide an annual scholarshipofapproximately$2,000peryear.

Executive in Residence, Mr. Shawn Poole generously agreed to match every gift up to an aggregatelevelof$25,000.

This scholarship will make a tremendous difference in the lives of many students, and the group invites anyone who is interested in contributing tovisithereformoreinformation.

In September, the Bowden Investment Group attendedAppalachian’sState8thAnnualBusiness for Good Conference to learn about the growing Environmental, Social, and Governance (ESG) movement in the businessworld. The conference hosted three excellent guest speakers: Bryan Matt, Head of ESG Advisory for the New York Stock Exchange, Jordan Feigh, Sustainability and Product Stewardship Manager for UNIFI, and Michael Winters, President & Chief Revenue Of icerofWinCup.

Bryan Matt has over 20 years of experience in corporate investor relations and is currently the Head of ESG Advisory at the New York Stock Exchange (NYSE). He educated the audience on the current relationship the NYSE and its listings have with ESG and how it is becoming a more common consideration for publicly traded companies. Mr. Matt also met with our two ESG analysts, Morgan Scott and Noah Delucia, to answer further questions as they were developing Bowden’s initial ESG criteria. Our analysts gained an immense amount of of knowledge from Mr. Matt such as future SEC plans for ESG requirements and were introduced totheMSCIESGratingsystem,oneoftheleading indicatorsusedglobally.

Our next speaker was Jordan Feigh, the Sustainability and Product Stewardship Manager at Uni i Manufacturing Inc., a top performerinperformance iberssuchas REPREVE®.REPREVE®isasustainable iberproducedfrompost-consumerand industrial waste, and is recognized globally as a reliable choice. Ms. Feigh’s role is to develop and execute Uni i's sustainability plan while also managing customerproductstewardshipneeds.In the past, she served as the Quality Assurance Manager for Uni i's REPREVE® Recycling Center, and has extensive knowledge of REPREVE® production. We thoroughly enjoyed our time with Ms. Feigh and thank her for spendingtheafternoonwithus.

Our inal speaker was Michael Winters who shared WinCup’s business mission. As President and CRO, Mr. Winters discussed how WinCup is improving the disposable cup industry by creating biodegradable styrofoam cups that dispose 92% over 4 years. Mr. Winters also updated the conference on their new “phade” straws that biodegrade in just 58 days while being a suf icient substitute for short term paper straws and harmful plastic materials. WinCup is inding environmental solutions for some of our mostharmfulpollutantsandisastepintheright direction.

Regardless of whether the attendees were previously familiar with ESG or were hearing about it for the irst time, the conference provided valuable insights and takeaways for all participants. In particular, the conference impacted the conversations about ESG within Bowden, as attendees observed how it was impacting business practices and company operations. The Business for Good conference also helped cultivate an appreciation for the endeavors of entrepreneurs and other motivated workers who strive to create positive changes by enhancing environmental sustainability, workplace conditions, and overall management practices.

In November, the 2022-2023 Broyhill Fellows CFA Institute Research Challenge team had the opportunity to attend the Invest for Charlotte conference,thankstoaninvitationfromMr.Chris Pavese. This was an amazing opportunity where we were able to hear from a variety of speakers and network with local professionals and students from other universities. We heard a fabulous conversation on investing from Anders Hall, the Vice Chancellor of Investments and CIO ofVanderbiltUniversity,andMikeSmith,theCIO of Global Endowment Management. The conversation was guided by Claire Fefer, the Investment Manager of Duke Management Company, as she inquired about their roles and how they go about making decisions to bene it people in the long run. We found this to be very insightful as they shared a glimpse into their years of experience, development of expertise, and their journeys to the successful positions theyareinnow.

Following the CIO conversation, we heard from John Carrington, a Managing Partner at Crow’s Nest Holdings, on his outlook and valuation of FergusonEnterprises.Hefocusedhispitchonthe HVACproductsthecompanyoffersaswellasthe growth he forecasted for the industry and company. Next, we heard from Chris Pavese, President andCIOof BroyhillAsset Management. Hesharedhisviewsregardingtheundervaluation of the tobacco industry as well as his investment thesisforPhilipMorrisInternationalanditsriskreducing products. This was very informative as we had the opportunity to hear from two wellestablished professionals on their outlooks for

speci ic markets and companies. This resonated strongly with us as our duty within the Bowden Investment Group is to have the same passion andconvictionsurroundingourinvestmentideas andthefutureoftheportfolio.

Lastly, we heard from representatives from two of the bene iciaries of the fundraising event, The Heartest Yard and STREAM. NFL Sportscaster Greg Olsen spoke about his foundation, The Heartest Yard, explaining his son’s heart disease and how that translated into his passion now to assist other children and families dealing with similar circumstances. Torrey Feimster, Director of D&I Advocacy at Global Endowment Management spoke on behalf of STREAM, an organization which works to strengthen racial equalitywithintheassetmanagementprofession, as well as other inance professions. STREAM works to improve diversity and inclusion efforts by providing underrepresented students with access to mentors, internships, scholarships and morewithintheindustry.Itwasinspiringtohear from successful professionals within the Charlotte community and how they have used theirknowledgeandpowerforthebettermentof thecommunity.

We would like to thank Mr. Pavese for his commitment and dedication to the Bowden InvestmentGroupashecontinuestoexposeusto amazing opportunities that we would not have otherwise. This was an incredible event and we learned so much about investing, speci ic industries,andhowtouseone’slifeobstaclesand successestohelpothers.

Re lections and Appreciation

2022 Fall Pitches

InAugustof2022,the elevennewanalystschose stocks to model and present in September. After presentingthosestockswouldbenarroweddown to iveforfurtheranalysisandtobepitchedatthe end of the fall semester. We’ve included brief descriptionsandthesesfortheoriginalproposals.

Pitched in December:

newbrands.Atthetimeitwaspitched,DECKsaw a 24% growth in revenue YOY, primarily driven byboththeHokabrandandanincreaseindirectto-consumer sales. The company’s growth was attributed to its brand diversi ication and logistics network, allowing it to capture multiple consumer segments, mitigate supply chain impacts,andreducein lationarypressures.Itsits in a niche footwear market, producing high qualityfootwearwithlargemargins.

COKE - Coca-Cola Consolidated is the largest manufacturer and distributor of non-alcoholic beverages. COKE purchases products primarily from The Coca-Cola Company (NYSE: KO) and operates across 14 Eastern United States. CocaColaConsolidatedwaspitchedasadefensiveplay with decreasing debt and steady growth as the company continues to expand its territory and productofferings.

Final Recommendation - Given our holdings in The Coca-Cola Company and the strong correlation between COKE and KO, we decided not to add COKE to the portfolio. Ultimately, we believed KO offered better stability and aligned more with the Bowden Fund’s goal of long-term value. Despite our recommendation COKE continuedtoreturn12%bytheendoftheyear.

Analysts - JimmySaid,DavidPrice,andIanWhite

Final Recommendation - Looking back, Deckers Outdoor Corporation would have been a great addition to the portfolio, earning 34.61% from thetimeitwaspitchedtillyearend.However,the group decided against adding it to the portfolio duetovaluationconcerns.

Analysts - NoahDeLuciaandStevenTesta

DECK - Deckers Outdoor Corporation is a leading global footwear, apparel, and accessories manufacturer that produces everything from lifestyle products to high-performance athletic wear. It provides a diverse set of products through ive main brands: Ugg, Hoka, Teva, Sanuk, and Koolaburra. DECK was pitched as a growth play due to tremendous increases in revenue through acquisitions and the creation of

ELF - e.l.f. Beauty is one of the lowest-cost makeup companies in the beauty industry, with an industry-leading focus on clean, vegan, and cruelty-free makeup products. When selecting a stock,wewantedto indsomethingthatwouldbe successful in any economic environment and a productthatwillnotbegoingawayanytimesoon, so we thought of makeup. e.l.f. Beauty has tremendous growth opportunities because of its focus on the quality of ingredients, its low-cost competitive positioning, and its expansion into skincare products. E.l.f. Beauty had a growing market share of the beauty industry when its closestandoldercompetitorswerelosingmarket sharein2022.

Final Recommendation - In hindsight, e.l.f. Beautywouldhavebeenanincredibleadditionto the portfolio. However, as a group we ultimately decided against adding it due to overall uncertainty in the future growth of the company. e.l.f. Beauty is quickly becoming a leader in the beauty industry through clean initiatives and a uniquefocusonprovidingmakeupatlow-costsin

comparison to all other brands. From September 1toDecember31,2022,e.l.f. Beautyhadareturn of43.96%,furthershowingthesigni icantimpact itwouldhavehadontheportfolio.

Analysts

McKenzieShailandCharlotteRice

-

HII - HuntingtonIngallsIndustriesisanAmerican shipbuilding company that specializes in designing, building, and maintaining military ships and submarines for the United States Navy and other international customers. The company was formed in 2011 as a spin-off of the defense and security conglomerate Northrop Grumman, and is now one of the largest shipbuilders in the world. In addition to shipbuilding, the company alsoprovidesengineering,logistics,andtechnical support services to its customers. The opportunities for growth in this company are derived from its strong relationship with the U.S. Navy, enabling it to secure contracts over its competitors, aswellasthe inelasticnature ofthe defense budget and geopolitical tensions from aroundtheworld.

Final Recommendation:

Despite its potential for revenue growth from government contracts, we determined that the stock was trading at a price that did not offer a suf icient margin of safety. While the company and its business model were attractive, the risk associated with investing in the stock at its currentpricewasdeemedtoohigh.

Analysts

-

MorganScottandLuisLopez-Bautista

continue to lead the guns and ammunition industryandiscurrentlyundervalued.Moreover, we believe that the company's upcoming relocation to Maryville, Tennessee, in 2023, will bene it the company through lower taxes and fewer restrictions, resulting in increased pro its in the future. With economic uncertainty and geopolitical tensions, combined with stricter regulations, SmithandWesson is well-positioned tomeettheanticipatedhighdemand.

Final Recommendation: We decided not to invest in Smith and Wesson as the controversy surrounding the company was deemed too risky. Concerns over volatility and social impact outweighed the fundamental inancial well being ofthecompany.

Analysts - JonathanFogleandJacksonNorwood

Equities Eliminated in September:

SWBI - Smith and Wesson, headquartered in Spring ield, Massachusetts, is a renowned irearms manufacturer with a product line consisting of handguns, long guns, suppressors, and other irearm-related products. The company's competitive product mix and strong brandloyaltyhavecontributedtoitssuccessover the nearly 200 years of its existence. We had a strong belief that Smith and Wesson would

LOVE - The Lovesac Company, a technology driven home furnishings company, designs, manufactures, and sells furniture. The company offers modular couches called Sactionals, premium foam bean bag chairs called Sacs, and associatedaccessories.Thecompanymarketsand sells its products through modern showrooms, and increasingly, through online direct sales and third party retailers. Lovesac’s accelerated growthderivedfromitsstraightforward,scalable business model, and its healthy balance sheet would drive future value and growth. Further, Lovesac’s target market, high income millennials, are growing in volume and stature, and Lovesac has been able to carve out a niche within the furniture industry with its continual unique, and innovative product offerings. The group decided not to research Lovesac further because of the uncertainnatureoftheeconomyatlarge,andthe cyclicalityofluxuryfurnitureexpenditures.

Analyst - JacksonNorwood

MGM - MGM Resorts International is a global

entertainment company with national and international locations featuring best-in-class hotels, casinos and more. MGM has a strong competitive advantage over other entertainment companies as it continually invests in its resorts by remodeling hotel rooms, restaurants, and nightclubs ensuringasuiteofpremierresortsin the market. This pitch was driven by the growth of online gambling worldwide. In the United States alone, there is an estimated 11.9% compound annual growth rate. As international markets continue to reopen, MGM is expected to bene it as long-term future growth in the Asian gaming market drives additional visitation at MGM Macau and MGM Cotai. Our decision not to further research MGM was due to the company’s high debt obligations and uncertainty in internationaltravel.

Analyst StevenTesta

TPR - Tapestry, Inc. is a leading New York-based fashion company that designs and manufactures luxury accessories and lifestyle brands. Known for their trendiness and quality, Tapestry products include handbags, footwear, and accessoriesforbothwomenandmen,aswellasa range of home decor items. The company operatesover1,500storesgloballyandalsosells its products through wholesale channels and online platforms. The thesis was that individuals who spend on luxury products are likely to continuetodoso,evenduringtimesofeconomic uncertainty. Our decision not to invest in Tapestry was based on concerns about the company’s inventory levels and its relative positionwithintheluxuryfashionindustry.

Analyst - LuisLopez-Bautista

wood while offering superior durability and resistance to weather, fading, staining, and mold. The original investment thesis was based upon the growing ESG concerns from consumers and their willingness to pay more for sustainable products. Ultimately, we decided not to invest in TREXduetoitshighcorrelationwiththehousing market and our concern for macroeconomic headwindsintheshortterm.

Analyst - IanWhite

TREX - Trex Company, Inc. is a manufacturer of composite decking and railing products. Trex's compositedeckingandrailingproductsaremade primarilyfromrecycledwoodandplastic,andare designed to mimic the appearance of natural

UNFI - United Natural Foods is primarily a wholesale distributor of conventional grocery and non-food items for grocery stores specializing in organic produce operating across the continental United States. Post-pandemic, we noticedagrowingdemandforspecialtygroceries in the recovering economy, and as a grocery distributor, United Natural Foods was a more diversi ied play than investing directly in an individual food producer or retailer and avoided the risk of luctuating food prices. We decided against further analysis in UNFI due to the company’s volatile earnings and insecurity in its supplychain.

Analyst -DavidPrice

WIRE - Encore Wire Corporation manufactures and sells electrical building wires and cables for interiorelectricalwiringintheUnitedStates.The company has products for interior wiring in homes, apartments, manufactured housing, commercial and industrial buildings, and others. It sells its products to wholesale electrical distributors primarily through independent manufacturer’s representatives. The investment thesis was based on the company’s strong inancial health, the rapid growth of new apartment buildings, and the increasing demand for electricity. We decided against investing in WIRE due to weakened expectations in the housingmarket.

Analyst - CharlotteRice

Member Testimonials

TheBowdenInvestmentGroupisthepremierlearningexperiencewithintheWalkerCollegeof Business.Membersarepromptedtopushthemselvesfarpasttraditionalexpectationsforbusiness students.Studentsreceiveanunparalleledbusinesseducationthroughinternalandexternal presentations,distinguishedvisitingguestspeakersandprofessional irmvisits,classoperationsand positionsdesignedtosimulatethatofapost-graduationworkenvironment,andthecollaborative assignmentsrequiredtomanagetheBIF.Totestifytotheprogramssuccess,the2022-2023class memberswereaskedtore lectontheirexperienceinBowdenandsharetheirthoughts.

Noah DeLucia - ESG Analyst

MyexperiencebeingapartoftheBowdenInvestmentGrouphasrisenfar above my initial expectations. During the past two semesters I have been pushedfurtherthanIeverhaveinmycollegecareerandlearnedwhatIam capable of. I will never forget the late nights, the memories I have made, lessonslearnedandrelationshipsbuilt.ThankyouMr.Pooleforyourinvaluablecareerandprofessionaladvice. Iwill missyour drysenseof humor. Dr. Hadley, yoursupport andcontinuouseffort tosee eachindividualsucceed in this group is inspiring and I look forward to giving back to the groupfollowinggraduation.IfIhadtopickmyfavoriteaspectofBowdenI valuethemostitwouldbetheconnectionIhavedevelopedwitheveryone inthegroup.Iamluckytohavebeengiventheopportunitytobeapartof thisgroupalongsideseveralbrilliantmembers.GoingintomycareerIfeel preparedandreadytotakemyfutureaspirationsheadon.

Jonathan Fogle - President

Establishing friendships with this group and witnessing our growth over the past year has made this experience truly special. The guidance provided by Dr. Hadley and Mr. Poole has had a profound impact on my classmatesandmyself,bothasstudentsandindividuals.Theirunwavering supportduringlongdaysandlatenightswasinvaluable.WhetheritbeDr. HadleygivingusgreatencouragementeverystepofthewayorsimplyMr. Poolegivingus"GoodNewsMonday''oradvicethatwasmuchneededin any situation. Having the opportunity to be in the Bowden Investment Group not only shaped me for my professional career, but also instilled lifelong principles to follow. I am forever grateful for everyone who has been a part of this journey! I cannot wait to see the great impression TheBowdenInvestmentGroupClassof2023willhaveontheworld!

Bowden Investment Group | 2022 Annual Report

Luis Lopez-Bautista - Industry Analyst

Being part of the Bowden Investment Group was an amazing experience formeasa irst-generationcollegestudentwithnoprior inancialliteracy. Thanks to Dr. Hadley and Mr. Poole, who I am forever grateful for, I developed crucial skills like professional development and fundamental analysis.Thisclassisperfectforlike-mindedindividualspassionateabout investing, and I recommend it to all future students. The rewards are immeasurable, and it has been one of the best experiences of my college career.

Jackson Norwood - Industry Analyst

My time in Bowden has been nothing short of life changing. Coming into the group last year, I hadn't really decided on what I wanted to do, or evenwhatoptionswereoutthere.ThispastyearIhavelearnedaboutthe processofworking for thingslargerthan oneself, andin that timeIhave fallen in love with inance, and my path seems clearer than ever. Dr. Hadley and Mr. Poole have been instrumental in this journey and have allowedme tobe me, while stillcoachingme up tomyfullest potential. I amverygratefulforthemtakingachanceonme!

David Price - BIG Update Editor

Lookingback,Istruggletorecognizetheterri iednewclassmemberIwas when invited to join the class a year ago. After my exceptional home educationinhighschool,Ihadyettofaceanacademicchallengeincollege that would push me to question my abilities. The superlative learning experiencepresentedinBowdenisnotjustduetoitsuniqueofferingsand design,butisprimarilybecauseofthepeoplewhopersonallystrivetogive theirallforthegroup.Icancon identlyguaranteethatonewillnot inda program more elevating or advisors as competent and caring as those found in Bowden, moreover, at the Walker College of Business. I can also promise that I will never be able to properly thank my classmates, my friends, my advisors, my parents, and my God for being with me through thegiftthatwasthisclass.

Charlotte Rice - Accounting Analyst

Bowdenhasstrengthenedmyunderstandingandfurtheredmycuriosityof the inancial and investing space. The group has allowed me to apply the skillsthatIhaveacquiredacrossmultiplebusinessclassesandapplythem in an impactful way. Being a part of Bowden has helped me to grow in communication, teamwork, professionalism, andmyintellectual curiosity. Looking forward, I will also look for understanding the "why" behind my ideas.

Jimmy Said - Economic Analyst

“Someone’s sitting in the shade today because someone planted a tree a longtimeago.”-WarrenBuffett

The experience I gained from BIG has equipped me with invaluable knowledge. One of the signi icant lessons I learned is the power of being patient and listening to others as that helps you understand different points of view. Have conviction, be patient, listen to others even if you disagree, don't let emotions get the better of you, and be kind. The group exposed me to opportunities and friendships that I would not have encountered otherwise, and I am immensely grateful for that. Undoubtedly, thisyear, alongside the group, wasthe best time Ihave had atAppalachianState.ThankyouDr.Hadley,Mr.Poole,andBIG2023!

Morgan Scott - ESG Analyst

TheBowdenInvestmentGrouphasgivenmethecon idenceandtheskills through repetition and correction to feel comfortable starting my career post graduation. I could not be more grateful for the structure of the course as it has taken me across borders, introduced me to in luential people, and challenged my comfort zone. I hope nothing but the best for classestocomeastheyareingreathandsandingreatcompany.

McKenzie Shail - Accounting Analyst

Being a member of the Bowden Investment Group has been the most impactfulandempoweringexperience Ihave everhad. Asa membermy favorite part was watching not only myself, but all of my friends, grow tremendouslybothpersonallyandprofessionally.ThatisallthankstoDr. Hadley and Mr. Poole who have a unique ability to simultaneously instill con idence and the desire to constantly learn& improve yourself. Among everything I gained from being in Bowden the most impactful lesson has been learning from Dr. Hadley and Mr. Poole the importance of always beinggratefulandpayingyoursuccessforward,astheydoforuswithno incentive.Iwillbeforeverthankfulforthisindelibleexperience.

Steven Testa - Vice President

My time at Appalachian State University taught me the value of hard work,butmyexperiencewithTheBowdenInvestmentGrouppushedme to my limits. Over the past year, I've learned to work harder than I ever thought possible, to believe in myself and my abilities, and to keep moving forward even when things get tough. These are skills that will serve me well not only in my future career, but in all areas of my life. Bowden taught me more than just skills. It taught me the importance of teamwork, collaboration, and positivity. I am grateful to Dr. Hadley and Mr. Poole for their unwavering support, belief in me, and leadership. Their positivity and enthusiasm was constantly shown and they never failedtokeepourheadsup.ThankstoBowden,Ihavegrownnotonlyasa professional but as a person. I am more con ident and adaptable than everbefore.IameagertotaketheselessonswithmeasIembarkonthe nextphaseofmyjourney.

Ian White - Economic Analyst

JoiningtheBowden Investment Group hashadthe greatestimpactonmy college journey. The blend of practical training and career advancement opportunitiesthatBIGprovidesisunparalleledwithintheWalkerCollege of Business. Through Bowden, I have gained valuable abilities and selfassurance that will serve me well in my future profession. Bowden has givenmetheskillsandcon idencetobesuccessfulinmyfuturecareerand IamextremelygratefulfortheopportunitiesthatBowdenhasofferedme.

A Final BIG Thank You

I hope that this report provides a glimpse of the learning and growth that this program has providedtoitsstudentsthroughoutthepastyear. Twelve high-achieving inance students began thisclassayearago,andupongraduation,aclass ofcon ident andwell-preparedprofessionalswill depart, ready to bring excellence to whatever ieldtheyenter.However,suchafeatwouldhave beenimpossibletoachievewithoutthesupportof manyothers.

Firstly, we are grateful to the faculty at the Walker College of Business for their support and making Bowden possible. Secondly, we extend our thanks to our generous donors whose contributions have funded trips and resources that would have otherwise been unattainable. Thirdly, we acknowledge and appreciate the alumniwhohavecomebeforeusandcontinueto pourintoourclass.

We also express our gratitude to our friends and family for supporting us through this endeavor. Furthermore, we thank the guest speakers and irmhostswhotookthetimetomeetwithusand

offer their knowledge. Our founders, Dr. Cox and Dr. Goff who began this wonderful tradition, deserveourutmostappreciation.Lastly,wethank our advisors, Dr. Hadley and Mr. Poole, for their consistent encouragement and belief in our abilitytosucceed.

We will strive to capitalize on the immense wealth of knowledge, wisdom, and care that we have received as members of this class putting it tousewhereverweareandhoweverwecan.

For questions or information about the Bowden InvestmentGrouppleasecontact:

BrandyHadley,Ph.D. hadleybe@appstate.edu (828)-262-6938

For questions or information about the annual reportpleasecontacttheeditor:

DavidPrice pricedb@appstate.edu