Students manage real money to place sixth in competition

The Messenger 02.18.11

University of Tennessee at Martin finance students placed sixth in the 2010 Tennessee Valley Authority Investment Challenge in competition with 23 other schools.
The TVA provides cash awards to the top universities in the Investment Challenge that earn the highest return for each calendar year. UT Martin will receive about $8,300 for its efforts in managing a stock portfolio valued at $480,000 at the end of 2010.
For the year of 2010, UT Martin students earned a 24 percent return on their investments. The Investment Challenge program as a whole returned 17.8 percent, versus 15 percent for the S&P 500 for 2010. For most of the12 years of the Investment Challenge program, the student-managed portfolios have beaten the S&P 500. The cash award will be added to the Kelly Murray Memorial Fund, which supports the finance program’s TVA program and student activities.
TVA’s Investment Chall-enge is a partnership between TVA and 24 universities in its service territory that provides a real-world learning experience in portfolio management. The challenge gives teams of students hands-on experience managing TVA stock portfolios.
Students actively manage TVA funds by designing long-term investment strategies, placing trades and providing performance reports to the program’s advisory board composed of faculty and investment industry professionals. UT Martin students were guided by Dr. Mahmoud Haddad and Dr. Arnold Redman, both professors of finance and co-directors of the UT Martin Investment Challenge Program. The students learn how to manage real money and meet all the requirements. They are held to similar guidelines as TVA’s professional money managers.
“Our students last year did outstanding work in managing the TVA portfolio, and we appreciate the efforts the students gave to the program,” Redman said. “Their work in the TVA challenge is even more impressive considering their management of the portfolio has earned returns that were better than that earned by many professional money managers.”
“The TVA challenge program represents a unique practical investment opportunity in which only selected college students are allowed to participate. The hands-on experience our students gain from the TVA portfolio class prepares them for better jobs in the financial market,” Haddad added.
The TVA Board created the Investment Challenge Program in 1998 to diversify the management of its Nuclear Decommissioning Trust Fund and give Tennessee Valley students experience in managing a stock portfolio. Originally, 19 universities received investment funds of $100,000 a piece, for a total of $1.9 million. The program has expanded to include 24 public and private universities in the TVA service area and the funds total about $10 million.

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