TTU Investment Class Outperforms Market, Peers to Win TVA ChallengeTennessee Tech University's Investment Challenge Class boasted an almost 30 percent return for the year, outperforming its peers and finishing first in total return in the TVA 2007 Investment Challenge.
The program allows undergraduate and graduate students from 25 schools the opportunity to manage a stock portfolio of large-cap stocks under similar rules as the TVA's professional money managers.
For 2007, the TTU Investment Challenge portfolio had a total return of almost 30 percent, besting the S&P 500, the broad market indicator used to evaluate the student portfolios, by nearly 25 percent. For the year, the average total return for the 25 schools was almost 10 percent.
"Needless to say, Deryl Martin and I were impressed with the students' picks this year," said Bob Wood, Heidtke Professor of Finance and current director of the TTU Investment Challenge Program. "Their best performers for the year were Apple, Southern Copper, Transocean, Focus Media Holdings, and Netflix."
In TTU's program, students recommend and discuss potential purchases. After individual research by each member of the class, the class votes whether to purchase the stock. The class uses price targets and stop-losses to further manage their holdings.
Since 1998, the TVA Investment Challenge has allowed students the hands-on experience of managing real money in a professional money-manager environment. The 25 schools in TVA's service area buy and sell stock seeking to outperform the market using funds from TVA's Nuclear Decommissioning Trust. During the nine years of the program's existence the combined student portfolio has beaten the S&P return in all but two of the years.
"TVA's Investment Challenge is an innovative and unique partnership between TVA and 25 universities in its service territory," said Kim Greene, chief financial officer of TVA. "The program has been a win-win for TVA and the universities. The universities have generated positive absolute and relative performance for TVA while providing a real world learning experience in portfolio management for students."