Permanent Fund shows strong returns in third quarter
APR 20 – The Alaska Permanent Fund returned 6.9% for the third quarter of Fiscal Year 2012, reclaiming ground lost last fall and bringing the year-to-date return to 1.9%. The Fund ended March with a value of $41.5 billion, the highest month-end closing value in its history.
“Our stock returns were in the double digits for the period, and this is what drove our performance,” said Michael Burns, Chief Executive Officer. “I don’t think we can say that everything is rosy, but markets seem to be returning to normal and these stock returns show that investors are relaxed enough to take on more risk.”
The Fund’s U.S. stock portfolio returned 13.3% for the quarter, while the non-U.S. and global portfolios returned 11.9% and 11.5% respectively. For the fiscal year-to-date, regional performance was less in sync. The U.S. stock portfolio returned 6.4% for the three-quarter period, while the non-U.S. portfolio showed a net loss of -7.2% and the global portfolio was flat at 0.6%.
Bonds and real estate have shown steady performance over the fiscal year, with the U.S. bond portfolio returning 1.7% for the quarter and 5.6% for the fiscal year-to-date. Non-U.S. bonds returned 1.2% and 5.2% for the respective periods, while the real estate portfolio returned 2.4% and 6.4%.
Alternative investments had varied performance for the quarter. The Fund’s private equity investments returned 4.5% for the quarter, bringing the year-to-date returns to 4.7%, and the real return program showed similar results, returning 4.3% and 5.6% for the respective periods. The absolute return funds' recent performance was positive, returning 2.9% for the quarter but was flat for the fiscal year-to-date at -0.3%. Infrastructure was also flat for both the quarter and the fiscal year-to-date, returning -0.6% and 0.2% respectively.
The Permanent Fund’s investments produced $485 million in statutory net income for the quarter, bringing the year-to-date total to $1.3 billion. This is the amount used to calculate the annual Permanent Fund Dividend Distribution.