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About – TVA Investment Challenge

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Purpose

The TVA Investment Challenge is an innovative and unique partnership between the Tennessee Valley Authority and 25 universities in its service territory that provides a real world learning experience in stock portfolio management.

The Tennessee Valley Authority is dedicated to partnering with colleges and universities in the region— investing in the community is part of its mission. By offering this rare learning opportunity to assist in molding the region’s next generation of financial leaders, TVA is doing its part to help the Valley prosper for years to come.


How it Works

Students actively manage TVA funds by designing long-term investment strategies, placing trades, and providing performance reports to TVA. Investment guidelines are similar to those used by TVA’s professional investment managers.

Universities can earn performance awards based on their returns versus the benchmark S&P 600 index.

TVA supports the program by utilizing some of its most experienced financial managers and analysts to provide guidance and resources to help students apply investment management concepts.

TVA also periodically visits the classrooms to discuss the strategy behind the students’ portfolio management decisions and offer constructive feedback.


History of the Investment Challenge Program

In 1998 TVA created the Investment Challenge by allocating $1.9 million to 19 universities to manage in actual investment portfolios. Because students demonstrated that they could perform successfully against their benchmark, TVA added six new schools to the program in 2003 and increased the total portfolio amount to $10 million. A TVA asset retirement trust fund provided the original $1.9 million for the program and the additional $8 million to expand it.

The Investment Challenge promotes economic development by helping strengthen the Valley’s educational infrastructure, a vital component of future economic growth. At the same time, the program makes a direct contribution to the training of the region’s future business leaders.

Facts

  • Established in 1998 with $1.9 million and 19 universities
  • Expanded to $10 million and 25 universities in 2003
  • Outperformed the S&P 500 by 1.8% since inception
  • Over $12 million in assets currently managed by students
  • Part of TVA’s Asset Retirement Trust, which was created to offset the future cost of decommissioning TVA’s non-nuclear assets