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Permanent Fund regains some ground in second quarter

JAN 26 - The Alaska Permanent Fund returned 4.2% for the second quarter of fiscal year 2012, mitigating some first quarter losses and bringing the fiscal year-to-date return to -4.5%. The Fund ended the period with a value of $38.6 billion.

U.S. stocks showed the most growth during the quarter, returning 12.3%, while global stocks returned 7.7% and non-U.S. stocks returned 3.5%. However, these gains were not enough to reclaim all of the losses of the first quarter and the portfolios’ returns remain in negative territory for the fiscal year-to-date.

“Between natural disasters, political upheaval and the European debt crisis, 2011 was a challenging year for global stock markets,” said Mike Burns, CEO. “These issues haven’t gone away, but the gains of this quarter and the performance in early 2012 suggest that the worst is hopefully behind us.”

The Fund’s real estate and bond portfolios helped balance the stock portfolios’ losses, providing positive returns for the quarter and the fiscal year. Real estate returned 3.1% and 4.7% for the quarter and fiscal year-to-date respectively. U.S. fixed income returned 2.0% for the quarter and 3.8% for the fiscal year, while non-U.S fixed income returned 0.7% and 4.0% for the respective periods.

The returns for the Permanent Fund’s alternative investments were mixed, with performance relatively flat or slightly down for the quarter and for the fiscal year.

Statutory net income, the amount used to calculate the dividend, was $386 million for the quarter, bringing the year-to-date total to $854 million.

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