FUND NEWS                               Jan 21, 2009

Markets weigh heavily on Permanent Fund in second quarter

JAN 20 – Continuing losses in the global financial markets lead to a -12.2% return for the Permanent Fund in the second quarter of fiscal year 2009. The Fund ended December 31 with a value of $28.8 billion, down $4.2 billion from the end of the first quarter on September 30.

“This has been a difficult time to be an investor, even a long term investor,” said Michael Burns, Chief Executive Officer. “Even those funds that appeared to ride out the early part of the storm, such as Yale and Harvard, are now posting significant losses.”

The Fund’s non-U.S. bond portfolio had the best performance, returning 6.9% for the quarter and 3.7% for the year-to-date. The U.S. bond asset class returned 0.8% for the quarter on the whole, although the portfolio managed internally by the APFC returned 3.4%. U.S. stocks returned -23.0%, non-U.S. stocks returned -22.5% while global stocks returned -21.3%. The Fund’s real estate and absolute return portfolios fared better, returning -5.2% and -8.9% respectively.

For statutory net income, the amount used to calculate the dividend, the APFC has recorded a $983 million net loss for the fiscal year-to-date.