University Students Beat the Market in TVA Investment Challenge

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February 27, 2014

KNOXVILLE, Tenn. – University students in the Tennessee Valley Authority's Investment Challenge Program outpaced the stock market's best annual performance in 16 years in 2013.

"It was a great year for our student investors even with the market's strong performance," TVA Chief Financial Officer John Thomas said. "TVA and ratepayers benefited from their hard work, and we believe the students benefited as well from the real-world experience they received through the program."

The Standard and Poor's 500 Index produced a 2013 return of 32.4 percent, the biggest annual advance since 1997. Students in TVA's Investment Challenge Program collectively outperformed the S&P 500 by 1.4 percentage points, with a return of 33.8 percent.

In fact, 17 of the 25 participating universities outperformed the S&P 500 in 2013, with five schools producing returns of more than 40 percent.

The top three universities for 2013 based on performance are:

  • Tennessee Tech University, 47.7 percent return
  • Alabama A&M University, 46.9 percent return
  • East Tennessee State University, 46.4 percent return

TVA's Investment Challenge Program is a partnership between TVA and 25 universities in the TVA service territory that provides hands-on experience in financial asset management and performance-based awards the universities can use to enhance their business school resources.

Student teams actively manage real stock portfolios for TVA, designing long-term investment strategies and selecting investments under the guidance of faculty members and within investment guidelines established by TVA.

Thousands of students have participated in the program since it began in 1998, and a number of them have been hired by TVA and other employers in the region after graduation.

"TVA is committed to promoting economic development in the Tennessee Valley," Thomas said. "The Investment Challenge Program nurtures an educational infrastructure vital to growth in our region, and we are proud to offer this opportunity to students in the communities we serve."

TVA initially provided $1.9 million from one of its long-term asset retirement trusts to start the program. Through 2013, the program has grown to over $12 million.

"The TVA Investment Challenge is an effective and innovative way to leverage our resources and offer experience and training to foster the next generation of financial leaders in the region," TVA Vice President and Treasurer Tammy Wilson said.

The participating universities are: Alabama A&M University, Austin Peay State University, Belmont University, Christian Brothers University, East Tennessee State University, Lipscomb University, Middle Tennessee State University, Mississippi State University, Mississippi University for Women, Murray State University, Tennessee State University, Tennessee Tech University, Trevacca Nazarene University, Union University, University of Alabama at Huntsville, University of Kentucky, University of Memphis, University of Mississippi, University of North Alabama, University of Tennessee at Chattanooga, University of Tennessee at Knoxville, University of Tennessee at Martin, Vanderbilt University, Western Carolina University and Western Kentucky University.

More information about the Investment Challenge Program can be found at http://www.tva.gov/investmentchallenge.

The Tennessee Valley Authority is a corporate agency of the United States that provides electricity for business customers and local power distributors serving 9 million people in parts of seven southeastern states. TVA receives no taxpayer funding, deriving virtually all of its revenues from sales of electricity. In addition to operating and investing its revenues in its electric system, TVA provides flood control, navigation and land management for the Tennessee River system and assists local power companies and state and local governments with economic development and job creation.

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