FUND NEWS                               Oct 31, 2008

Permanent Fund down for first quarter

OCT 31 - Global market conditions weighed heavily on the Alaska Permanent Fund, which returned -8.5% for the first quarter of the fiscal year, and ended September 30 with a value of $33.0 billion.

“These certainly aren’t easy times, but our advantage is right there in our name - Permanent” said Michael Burns, Chief Executive Officer. “Our board sets an allocation for the long term, and accepts that volatility will come in the short term. Our job now is to hold to our long term plans, and not be tempted to change course in the middle of the storm.”

The Fund’s U.S. stock portfolio returned -8.1%, non-U.S. stocks returned -22.5% and global stocks returned -17.0%. Real estate had the only positive return for the portfolio, returning 0.2% for the quarter. Bonds had limited losses, with the U.S. portfolio returning -2.4% and the internally managed portfolio returning -1.6%. Non-U.S. bonds returned -3.0%. The Fund’s absolute return portfolio had a -9.1% return.

Statutory net income, the amount used to calculate the dividend, has provided a $137 million net-loss for the fiscal year to date.

“The Legislature was wise to base the dividend calculation on a five-year average of statutory net income,” said Burns. “Keep in mind that we have some very large numbers still in the average from the last few fiscal years, and with our cash stream from real estate rent and other sources, we expect to end the fiscal year with a positive balance for statutory net income.”