Western Carolina University finance students outperformed both the Dow Jones industrial average and Standard & Poor’s 500 average, as well as 24 other college teams, to take first place in an investment competition sponsored by the Tennessee Valley Authority.
The TVA Investment Challenge provides hands-on experience in financial asset management, with student teams actively managing stock portfolios for the federal corporate agency, designing long-term investment strategies and selecting investments under the guidance of faculty members and within established guidelines. TVA provides electricity for business customers and local power companies, serving more than 9 million people in parts of seven southeastern states.
The WCU team accepted the top honors Friday, April 6, at the TVA Investment Conference and Awards Celebration in Nashville, Tennessee. Team members were John Morgan, Graham Pollard, William Fisher, Ethan Sell and Casey Connor. They were joined by fellow finance students Michael Mathis, Florian Nohammer, Sam van Dam and Yannick de Jager, who supported team efforts.
Students spent the fall semester analyzing companies, industries and the economy. They also worked with investment professionals who provided support as they selected a stock portfolio, tracked industries and trends, re-evaluated the portfolio and analyzed potential new stocks.
“The opportunity to manage real money is probably the most valuable educational experience I have had at Western,” Pollard said. “Compared to doing a stock simulation, the level of accountability on the students is way higher, which is much more realistic to what we will face in our careers post-graduation. The TVA portfolio is also an incredible resume builder, and has helped me get a great internship this summer.”
The WCU team had amazing returns of 29.54 percent, said Grace Allen, WCU professor of finance. “This is real money, real-world experience that students could never get by reading a textbook. We managed about $500,000 to $550,000 in equities,” she said.
“The results have increased the students’ confidence, but they also are very humble knowing that they are not professionals yet, they still have so much to learn,” Allen said. “I think it makes them want to work harder to enhance their skills ― they tasted success and want it again. It is extremely difficult to consistently outperform, and they realize without hard work it will not happen again. But by outperforming the S&P by almost 8 percent, they know it is obtainable.”
The TVA Investment Challenge began in 1998 as a nearly $2 million program providing $100,000 to 19 participating universities, with funding coming from a portion of the money the agency has set aside to decommission its nuclear power plants.
“Our student investors exceeded expectations by beating the S&P 500 average and outperforming last year’s strong financial market,” said Tammy Wilson, TVA vice president. “For the past 20 years, TVA has partnered with the region’s top universities to help over 9,000 business students learn to invest, giving them an advantage in today’s competitive job market.”