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Permanent Fund gains 4.6% in first quarter

(OCT 21) The Alaska Permanent Fund returned 4.6 percent for the first quarter of fiscal year 2014, and increased in value by $2.2 billion from the start of the fiscal year to reach $47.0 billion, according to unaudited figures released by the Corporation. The Fund’s investments were positioned more conservatively (and assumed less risk) than the composite performance benchmark, and as a result lagged the benchmark return of 5.7 percent for the period ending September 30.

The Fund’s stock portfolios, which comprised close to half the Fund’s investments, drove the positive performance for the quarter. The U.S. portfolio returned 8.3 percent, while the Non-U.S and global portfolios gained 8.8 and 8.0 percent respectively.

“Although economic indicators suggest that we should be seeing more sluggish returns, both U.S. and overseas markets ended the quarter on high notes,” said Michael Burns, CEO. “The path wasn’t completely smooth. Concern over whether the Fed would continue its stimulus program lead to a dip in U.S. stocks mid-quarter, but the Fed held steady leading to a September rally.”

Although the gains were not as dramatic, the Permanent Fund’s other investments also saw positive returns for the period. The U.S. and non-U.S bond portfolios returned 0.7 percent and 0.8 percent respectively, while the real estate holdings were up 1.7 percent. The Fund’s absolute return program gained 1.4 percent, while the real return program returned 1.9 percent.

Statutory net income is the amount used to calculate the dividend according to Alaska state law. For the first quarter of the fiscal year, the Permanent Fund earned $298 million in statutory net income.

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