Permanent Fund up 4.9 percent
AUG 20 - The Alaska Permanent Fund’s investments gained 4.9 percent in fiscal year 2015, ahead of the performance benchmark return of -1.4 percent, according to preliminary figures released today. The Fund ended June 30 with a value of $52.8 billion after accounting for the Permanent Fund Dividend transfer. These favorable relative results are consistent with three and ten-year returns, and were achieved with generally less risk than the benchmark.
“This was a more volatile year for the capital markets, so we are pleased to be able to report a positive return overall,” said Valerie Mertz, Acting Executive Director. “After two years of rising stock markets, we weren’t surprised to see corrections in the U.S. and overseas markets at the start of the fiscal year. Later rallies helped make up lost ground, but the earlier losses certainly weighed on overall returns. The risk aware approach we take to managing assets helped us to successfully navigate this more difficult market environment.”
The U.S. stock portfolio gained 7.2 percent for the fiscal year, while the non-U.S. portfolio returned -5.2 percent. The Fund’s global portfolio, which contains both U.S. and non-U.S. stocks returned 1.2 percent. Bonds had periods of difficulty over the fiscal year as well, and while the Fund’s U.S. portfolio was up 1.2 percent, the non-U.S. portfolio lost 2.4 percent.
Real estate was an area of growth for the Permanent Fund in more ways than one. Not only did the Fund’s investments gain 9.8 percent for the fiscal year, but the portfolio expanded in notable ways as well. The Fund’s long-time investment, Tyson’s Corner Center outside Washington D.C., celebrated the successful grand opening of a sizeable three-building addition, including an office tower, hotel and apartment complex. Finally, the purchase of 50-percent ownership interests in retail properties in Portugal and Spain added to the year-old European portfolio.
Private equity was a strong contributor, with the portfolio gaining 16.5 percent over the fiscal year. The Fund’s infrastructure investments were also up, returning 4.7 percent for the period. The absolute return and real return portfolios are comprised of multiple asset types, and returned 1.7 percent and 3.4 percent respectively.
Statutory net income is the amount used to calculate the annual Permanent Fund Dividend. The Fund earned $2.9 billion in statutory net income for fiscal year 2015, and transferred $1.4 billion to the Permanent Fund Dividend Division for the 2015 dividend payment. The 2014 dividend transfer was $1.2 billion.
Final audited returns will be presented to the Board of Trustees at the Corporation’s annual meeting on September 29 and 30 in Anchorage. Additional detailed information can be found at the following links for the Permanent Fund’s financial statements and investment performance.