Alaska Permanent Fund performance up in final quarter
The Alaska Permanent Fund's investments sustained a 17.4% loss for Fiscal Year 2009 according to preliminary financial statements the Corporation released today. The Fund ended the fiscal year with a value of $30.0 billion after accounting for the Permanent Fund Dividend transfer, $6.5 billion less than the value on June 30, 2008.
"I can't say we're out of the woods yet, but the market rally that began in March allowed the Fund to return 11.2% in the final quarter of the fiscal year," said CEO Michael J. Burns. "2008 was one of the five worst years in the 218 year history of the U.S. stock markets, and it certainly took its toll on the Fund. The spring rally was a welcome sight after well over a year of down markets."
The stock portfolios, which make up more than half of the Fund, were the hardest hit. The Fund's U.S. stock portfolio returned -24.8% while the non-U.S. and global portfolios returned -31.3% and -31.4% respectively. Real estate was also down, contributing a loss of 15.3%. And the Fund's alternative investments were not spared either, with absolute return investments returning -13.6%.
The bright spot for the year was the Permanent Fund's bond portfolios. The U.S. portfolio returned 3.3%, while the non-U.S. portfolio returned 3.6%.
"Regardless of the performance over the last 18 months, I think that the Alaska Permanent Fund is still a great success and Alaskan's should be proud of the foresight they showed in creating the Fund more than 30 years ago," said Burns. "The losses of the last year are a little easier to withstand when you consider that over its history the Fund has taken in $13.9 billion in royalties and other deposits, paid $17.5 billion in dividends, including this fall's dividend, and was still worth $30 billion at the end of the fiscal year."
For the first time in its history, the Fund had a net loss of statutory net income, the cash income stream used to calculate the dividend. Rental income, dividends from stocks and interest from bonds comprise the flow into statutory net income, as well as the gains or losses on any assets that are sold. For Fiscal Year 2009, statutory net income was roughly -$2.5 billion. However, when included in the five-year average with the statutory net income from the prior four fiscal years, the calculation provided a $874 million dividend for 2009. This is lower than the $1.3 billion dividend that was distributed in 2008.
For full financial statements and investment performance reports, visit apfc.org .
August 4, 2009