Asset allocation

The Board's goal is to increase the Fund's market value by five percent more than the rate of inflation each year. To reach this goal, the Board uses a strategic asset allocation, which is set out in an updated resolution each year. For large institutional investors such as the Permanent Fund, it is estimated that up to 90 percent of all investment returns are attributable to asset allocation.

The Board considers the risks and rewards among different combinations of asset types, then decides how much of the Fund to invest among different types of assets. Over the Fund's history, it has gradually increased the variety of asset types it holds.

The asset types the Fund currently holds are:

publicly traded stocks (equities)
private equities
bonds (fixed income)
real estate
absolute return strategies (hedge funds)