Memphis, UT top investors in TVA program
KNOXVILLE (AP) — Led by teams from the University of Memphis and the University of Tennessee, student investors again outperformed the stock market for the Tennessee Valley Authority in 2003.
Twenty-five universities participating in TVA’s Investment Challenge program produced a 29.8 percent return on their nearly $13 million portfolio last year, said TVA financial services manager Wilson Taylor.
By comparison, the Standard & Poor’s 500 index gained 28.7 percent during the same period, while TVA’s professional money managers achieved a 31.5 percent return.
TVA created the program in 1998 to give budding financiers real-world investment experience. The student portfolio is part of a $710 million trust fund TVA is building to pay for decommissioning its nuclear plants in coming years.
Fifteen of the 25 universities outperformed their stock market benchmarks, whether it was the S&P 500, the BARRA Value Index or the BARRA Growth Index.
But none did better than the team from Memphis, which generated a 41.7 percent return in 2003. Tennessee-Knoxville was second at 41.5 percent and Christian Brothers University in Memphis was third at 41.4 percent.
Tennessee’s team for the third consecutive year also had the best three-year return — an astounding 53.8 percent gain. That’s a 15.4 percent annualized return despite a tough 2002 when everyone lost money.
Murray State University of Kentucky was second for the three years with a 33.9 percent gain, followed by East Tennessee State University with a 9.2 percent increase.
During the period, the S&P 500 suffered an 11.7 percent decline.
“This is one of the finest Investment Challenge teams UT has ever had,” said Al Auxier, an associate finance professor at Tennessee who advises the team. “Their knowledge of the marketplace and ability to analyze investment opportunities is outstanding.”
Although TVA has dropped the program’s annual conference and job fair to save money, it still gives cash awards.
The best annual performance carries prizes of $15,000, $10,000 and $5,000, respectively. Awards for best three-year performances are $20,000, $15,000 and $10,000.
TVA, the country’s largest public utility, offered the program to schools within its service area, which covers Tennessee and parts of Alabama, Mississippi, Georgia, North Carolina, Kentucky and Virginia.
The other participating universities are: Alabama A&M, Austin Peay State, Belmont, Lipscomb, Middle Tennessee State, Mississippi State, Mississippi University for Women, Murray State, Tennessee State, Tennessee Tech, Trevecca Nazarene University, Union University, Alabama-Huntsville, Kentucky, Mississippi, North Alabama, Tennessee-Chattanooga, Tennessee-Martin, Vanderbilt, Western Carolina and Western Kentucky.
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On the Net:
TVA Investment Challenge: http://www.tva.gov/investmentchallenge