March 12, 2008
UT Martin student investment team rewarded in ‘real world’
MARTIN, Tenn . - Each semester students in the College of Business and Public Affairs manage a stock portfolio by participating in the Tennessee Valley Authority Investment Challenge program. The program is an innovative and unique partnership between TVA and 25 universities in its service territory that provides a real-world learning experience in portfolio management. The challenge gives students enrolled in the Finance 411 class hands-on experience in stock analysis and in managing the TVA stock portfolio.
The TVA Investment Challenge Program is completing its 10th year. UT Martin has participated in the program since its inception in 1998 and recently was informed the university will receive a $10,000 performance award for 2007, placing second in the competition with an annual return on investments of 28 percent compared to the S&P 500 composite index return of 5.5 percent. Additionally, UT Martin is in first place in the three-year performance category with an annual return of 21 percent (versus the S&P return of 8.6 percent).
As part of the program, UT Martin finance students actively manage TVA funds by designing long-term investment strategies, placing trades and providing performance reports to TVA. UT Martin students are guided by Drs. Mahmoud Haddad and Arnold Redman, professors of finance. The students, as portfolio managers, learn how to manage real money and meet professional portfolio managers’ fiduciary responsibilities. They are held to similar guidelines as TVA’s professional money managers. During the current academic year, Kelly Murray, a student in the UT Martin master's in business administration program, has served as the senior manager of the portfolio, graduate assistant and mentor to the student managers. During the summer of 2007, the portfolio was actively and successfully managed by Murray; Ryan Stover and Cody McCone, finance majors; and David Wynn, MBA student.
“The hands-on investment experience this course offers our students is professional experience which permits them to become tomorrow’s entrepreneurs and business leaders. It has been an excellent recruiting tool for good positions at leading financial corporations,” Dr. Haddad said.
Speaking of the performance award, Dr. Redman said, “These funds will further benefit the TVA Investment Challenge program in our department and the new student chapter of the Financial Management Association. Funds from past awards (in 2000 and 2006) have financed access to CNBC, student access to Barron’s Online, stock data used for financial analysis, travel to this year’s FMA Leadership Conference in Denver, Colo., and participation in the Redefining Investment Strategy Education Conference at the University of Dayton.”
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 25 universities, and the funds total approximately $9 million.
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