University of Alabama at Birmingham: Gift from TVA provides UAB students real-world investment experience

The UAB Green and Gold Fund, the University of Alabama at Birmingham Collat School of Business’ award-wining, student-managed investment portfolio, received $500,000 from the Tennessee Valley Authority through their TVA Investment Challenge Program. This gift from TVA will give Collat students real-world experience as they invest the funds on behalf of TVA using long-term strategies learned in the classroom.

“It’s a testament to the resources that UAB and the Collat School of Business have given the students,” said Daniel Sanabria, Green and Gold Fund adviser and finance instructor. “When TVA came to visit, they were highly impressed not only with the resources that students have available but also with the students who represented the Green and Gold Fund.”

Students will use a top-down approach to invest the challenge funds, explains Anthony Marino, Green and Gold Fund chief investment officer. From there, they will invest the allotment in large-cap domestic equity stocks, look at the economy, measure the attractiveness of different sectors and then decide which companies in the attractive sectors are worth investment. The goal is for students to determine which stocks will outperform others and create a portfolio that will outperform their benchmark — the S&P 500 Total Return Index.

“It’s a really cool way for students to add value, to hone their skills at security analysis,” Marino said.

UAB is one of 25 universities participating in the TVA Investment Challenge Program. Since 1998, student teams have managed money from TVA’s Asset Retirement Trust Fund as a part of the organization’s larger mission to keep customer rates low. It is one of the largest student-managed investment programs in the United States.

“It’s a really exciting opportunity to be able to partner with a university, not just supporting education, but providing an investment opportunity that enhances classroom learning,” said Tammy Wilson, TVA’s vice president, treasurer and chief risk officer. “What the students are doing is contributing to TVA’s mission of providing low-cost reliable power by earning a return on our investment assets that are going to one day offset the decommissioning costs of our generating assets. It helps us keep our rates low.”

In addition to bragging rights, the Green and Gold Fund will receive a share of any profit that exceeds the benchmark, which can be used for scholarships, stipends or other resources for students.

Established in 1998, the Green and Gold Fund allows undergraduate and graduate students to gain real-world portfolio management and security analysis experience through the application of professional investment strategies and sound risk management principles. The fund currently manages more than $600,000 in assets in addition to the TVA challenge funds.

UAB’s participation in the TVA Investment Challenge Program is also a marker in the continuing, strong relationship between the TVA, Collat and the Collat Career Center, says Andreia Stechmann, assistant director of Employer Engagement at the Collat Career Center.

“We are thrilled to see another priceless experience for our students come to fruition as a result of this valuable partnership,” Stechmann said. “TVA’s investment in our students’ success through the TVA Investment Challenge Program will provide Collat students with the ability to stand out among their peers and expand their skill set and knowledge as they enter the workforce and start their careers in the finance sector. We are thankful to be a partner business school and look forward to continuing to build upon this great partnership with TVA.”