FUND NEWS                               May 10, 2005

Trustees granted investment authority

MAY 10 – The Alaska State Legislature gave the APFC Board authority to use the Prudent Investor Rule as the guideline for investments with the passage of House Bill 215, sponsored by Representative Norman Rokeberg.

MAY 10 – The Alaska State Legislature gave the Alaska Permanent Fund Corporation Board of Trustees authority to use the Prudent Investor Rule as the guideline for investments with the passage of House Bill 215, sponsored by Representative Norman Rokeberg (R-Anchorage). Under the change, the Trustees will, by regulation, maintain a list of investments for the Fund.

In the current investment environment, it is important for a portfolio to be diversified across a wide range of assets, especially assets that do not respond in the same way to similar market conditions. This structure better ensures a positive return for the Fund and lowers overall risk.

Prior to the passage of this legislation, the Fund could only be invested in assets listed in state statutes. Any additions or changes to the list had to be made through the legislative process, which can often take two or more years to complete.

HB 215 kept several important restrictions in statute, including the requirement that all investments conform to the Prudent Investor Rule. The bill directed Trustees to maintain a list of allowed investments in regulation, and provided guidelines for how changes may be made. It passed the House on April 19 with a vote of 30-8, and passed the Senate on May 8 with a vote of 17-2. HB 215 now moves to Governor Frank Murkowski’s desk for consideration.