College Students Beat Wall Street in TVA Investment Challenge

June 7, 2010

KNOXVILLE, Tenn. – College students in TVA’s Investment Challenge Program once again outperformed the experts on Wall Street in 2009 and, at the same time, earned money for their schools.

The program is a partnership between the Tennessee Valley Authority and 24 universities in the TVA service territory to provide students a hands-on experience managing a real stock portfolio for the agency.
Over a calendar year, teams of students manage an average of $330,000 of TVA funds per school, by designing long-term investment strategies under the guidance of faculty members. That includes analyzing companies, buying and selling stocks and tracking the risks and returns. The universities operate under similar guidelines as TVA’s own professional investment managers.

“The TVA Investment Challenge is a creative use of our resources that offers experience and training for the next generation of financial leaders in the region,” TVA Senior Vice President and Treasurer John Hoskins said.

In 2009, the universities collectively beat the average return on the Standard & Poor’s 500 index by 5.42 percent, with 31.88 percent returns last year. The program average has beaten the S&P 500 index eight times since it began in 1999.

TVA provided $1.9 million from TVA’s Nuclear Decommissioning Trust Fund to start the program. The program’s investment pool has now grown to around $8 million.

“The Investment Challenge is not a simulation or paper portfolio. This is real money that we’ll one day use to decommission our nuclear plants,” Hoskins said. “These students are part of TVA’s financial success.”
Universities also receive monetary awards based on the amount of assets they managed and the rate of returns. The combined performance awards totaled $71,597 in 2009.

The three top schools for 2009, based on performance, are:

• Lipscomb University, 62.29 percent return
• Western Kentucky University, 45.62 percent return
• East Tennessee State University, 43.83 percent return

Monetary Awards:
Lipscomb University: $8,602
Trevecca Nazarene University: $7,501
East Tennessee State University: $6,485
Western Kentucky University: $6,106
Belmont University: $5,943
Vanderbilt University: $5,894
Alabama A&M University: $5,565
Western Carolina University: $5,374
University of Alabama, Huntsville: $4,843
Mississippi St. University: $4,137
University of Tennessee, Chattanooga: $3,995
Murray State University: $2,346
Union University: $1,376
University of Tennessee, Martin: $1,314
University of Memphis: $1,070
Middle Tennessee State University: $780
University of Kentucky: $306

Other participating schools include: Austin Peay State University, Tennessee State University, University of Mississippi, Mississippi University for Women, University of North Alabama, Christian Brothers University and Tennessee Technological University.

The Tennessee Valley Authority, a corporation owned by the U.S. government, provides electricity for utility and business customers in most of Tennessee and parts of Alabama, Mississippi, Kentucky, Georgia, North Carolina and Virginia – an area of 80,000 square miles with a population of 9 million. TVA operates 29 hydroelectric dams, 11 coal-fired power plants, three nuclear plants and 11 natural gas-fired power facilities and supplies up to 36,000 megawatts of electricity, delivered over 16,000 miles of high-voltage power lines. TVA also provides flood control, navigation, land management and recreation for the Tennessee River system and works with local utilities and state and local governments to promote economic development across the region. TVA, which makes no profits and receives no taxpayer money, is funded by sales of electricity to its customers. Electricity prices in TVA’s service territory are below the national average.

Contact:
Scott Brooks, Knoxville (865) 632-8031
TVA Media Relations, Knoxville (865) 632-6000
www.tva.com/newsroom