FUND NEWS                               Jan 19, 2006

Fund posts second quarter results

JANUARY 19 - The Alaska Permanent Fund gained $932 million and returned 2.4% for the second quarter of the fiscal year, ending on December 31, 2005 with an unaudited value of $32.2 billion. The return for the first half of fiscal year 2006 was 6.7%, with a gain of $2.3 billion in the Fund`s value.

The Alaska Permanent Fund gained $932 million and returned 2.4% for the second quarter of the fiscal year, ending on December 31, 2005 with an unaudited value of $32.2 billion. The return for the first half of fiscal year 2006 was 6.7%, with a gain of $2.3 billion in the Fund`s value.

Statutory net income, the amount used for calculating the dividend, was $735 million for the quarter, bringing the fiscal year-to-date total to $1.3 billion. Based on the year-to-date earnings and projected income for the rest of the year, dividends are likely to be higher this fall than they were in 2005.

Fears of inflation and rising interest rates resulted in a lower second quarter return for the Permanent Fund, compared to first quarter results. The Fund lost ground in October, falling almost $400 million in value by month end, with all asset classes providing negative returns. Lower oil and gas prices helped fuel a November rally, causing the Fund to rise in value by about $830 million. But while December was a positive month, producing $440 million in gains for the Fund, it was not as strong as experts had predicted. Increasing energy costs and continuing concerns over when the Fed was going to stop raising interest rates slowed US stocks, resulting in “the rally that wasn’t,” said APFC Chief Investment Officer Rick Shafer. International stocks and bonds did much better, contributing most of the year-end gains.